What counts as ‘substantial non-trading activities’ for BADR?
Previously called Entrepreneurs’ Relief, the type of CGT (Capital Gains Tax) relief now known as BADR (Business Asset Disposal Relief) is only available for trading companies and groups that carry out primarily trading activities.
Gains from the disposal of company shares may be eligible for a reduced CGT rate of 10%, but only if the activities of the trading company ‘do not include, to a substantial extent, activities other than trading’ – but what qualifies as ‘substantial’?
Those concerned about qualifying for Business Asset Disposal Relief and claiming CGT reductions will be interested to know that the definition of ‘substantial non-trading’ has recently changed.