Entrepreneurs' relief - rent

When the entrepreneurs' relief was introduced to replace taper relief, the proposals prohibited the giving of any new relief for assets used in a business where rent had been charged for the assets. With an equivalent prohibition not having been present in the outgoing taper relief code, many small business persons were going to be denied an entitlement to the new relief on the basis of actions taken by them before the current relief was known.

The new, and snappily entitled, section 169P(5A) Taxation of Chargeable Gains Act 1992, has now been introduced to the Finance Bill in its final knockings.

The amendment holds that pre April 2008 rent received on associated assets will now be disregarded when it comes to determining the disponor's entitlement to the CGT entrepreneurs' relief.

Whilst April is when the entrepreneurs' relief came into effect, and an amendment is certainly welcome, it remains that many taxpayers will have continued to collect rent post April, on assets such as premises used by family companies, in the not unreasonable expectation that, having made a meal of it in the first place, there was no likelihood that the government would correct its own error.

But quite why, in the interests of commonsense and fairness, the disregard could not have applied to rent charged on such assets up to the date of Royal Assent, or even April 2009, is not apparent from Report Stage debates. We can now hope for the announcement of a concession to go with the retrospective amendment to a retroactive law. So much for simplification.