HMRC internal manual

Capital Gains Manual

CG63965 - Business Asset Disposal Relief: meaning of business

Entrepreneurs’ Relief was renamed in Finance Act 2020 with effect from 6 April 2020. The new name is generally used in this guidance but should be read as applying to times before that date.

For the purpose of Business Asset Disposal Relief ‘business’ is defined at TCGA92/S169S (1) as -

  • a trade, profession or vocation,
  • that is conducted on a commercial basis and with a view to the realisation of profits.

Guidance on the meaning of “trade” is available at BIM20000+.

Furnished holiday lettings - TCGA92/S241

Business Asset Disposal Relief may be available where the business is the commercial letting of furnished holiday accommodation in the UK (ITTOIA05/S322+) which is treated by virtue of TCGA92/S241 as a trade for certain capital gains purposes or commercial letting of furnished holiday accommodation within the EEA (TCGA92/S241A).

Business other than a trade etc.

Where a claim to Business Asset Disposal Relief is made and:

  • the income arising from a business carried on by an individual or partnership has been assessed as trading income, and
  • either before or after the cessation of the business or the disposal of the whole or part of the business

you discover that, despite the income being assessed as trading income, the business is not that of a trade or of furnished holiday lettings, you should submit the case to Capital Gains Technical Group.