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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Entrepreneurs’ Relief: trading company and holding company of a trading group - meaning of "as soon as is reasonably practicable in the circumstances"

TCGA92/S165A (5) and TCGA92/S165A (9)

Rather than impose a fixed time limit, the statute allows companies and groups whatever time is reasonable, having regard to the particular circumstances, to prepare to carry on a new trade or to acquire a trade or trading company.

What is “reasonably practicable in the circumstances” will depend on the facts in each case. For example, a company may be in negotiations to acquire a trading company but owing to circumstances beyond its control the purchase is delayed. There might be, for example, a problem with the vendor proving title to the company’s assets. Where this was the reason for the delay we would not suggest that the acquisition had not been made as soon as was reasonably practicable in the circumstances.