Entrepreneurs’ relief - acting in haste might offer no relief

Although Entrepreneurs' relief is readily available to employees and directors who have held the right number of shares for long enough, there is a trap for the unwary and hot headed.

An employee or director who, for example, falls out with his colleagues and resigns before selling his shares in the company will forfeit his right to reduce his tax bill by nearly two thirds, since he will no longer be an employee and will therefore fail to meet this criterion at the date of sale, regardless of how long he might have worked for the company.

There are many times when it's right to make a stand or act on a matter of principle.

But there are others where it may be better to bite your tongue and count to ten...

David Mansell is a tax adviser and a partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with David you can call him on 01604 669330.

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