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HMRC internal manual

Capital Gains Manual

Entrepreneurs’ Relief: qualifying “associated disposals” by individuals: disposals before 18 March 2015

The conditions that applied to disposals before 18 March 2015 are similar to the revised rules but do not require a minimum size of “material disposal”.

There will be “a disposal associated with a relevant material disposal” (or associated disposal) when all three of the following conditions are met – TCGA92/S169K(1)

Condition A. TCGA92/S169K(2).

That an individual disposes of:

  • all or part of their interest in the assets of a partnership, or
  • shares in, or securities of a company (or interests in such shares or securities).


The disposal of partnership interest, share or securities must qualify as a material disposal of business assets.  However, there is no requirement either for a gain to arise on this disposal or for a claim to Entrepreneurs’ Relief to be made in respect of any gain that does arise.

Condition B. TCGA92/S169K(3).

That the associated disposal is made as part of the process of withdrawal of the individual from participation in the business of the partnership or the trading company (or a company that is a member of the trading group of which the company is a member).

See CG63998 for a discussion of what withdrawal means.

Condition C. TCGA92/S169K(4).

That the asset which is subject of the associated disposal had been used for the purposes of the partnership business or company business throughout a period of 1 year ending with either

  • the date of the material disposal of business assets , or if earlier
  • the cessation of the partnership or company business.

If the individual disposes of an interest in an asset, Condition C refers to the use of the asset in which the interest is held, not the use of the interest.

In certain circumstances the amount of the gain on an “associated disposal” that qualifies for Entrepreneurs’ Relief may be restricted. See CG64145.