Taxation of Chargeable Gains Act 1992 section 169J

Disposal of trust business assets

Section 169J sets out the conditions under which a disposal of assets held within a trust qualifies as a disposal of trust business assets for the purposes of Business Asset Disposal Relief (formerly Entrepreneurs' Relief).

• Three conditions must all be met: the trustees dispose of settlement business assets (shares, securities or business-use assets held as settled property), there is a qualifying beneficiary with an interest in possession in the relevant settled property, and a relevant condition linked to the type of asset is satisfied.
• For disposals of shares or securities, the company must have been the qualifying beneficiary's personal company and a trading company (or holding company of a trading group) throughout a 2-year period ending no earlier than 3 years before the disposal, and the beneficiary must have been an officer or employee of that company or a group member during the same period.
• For disposals of other business assets, those assets must have been used for the qualifying beneficiary's business throughout a 2-year period ending no earlier than 3 years before the disposal, and the beneficiary must have ceased carrying on the business on or within 3 years before the disposal date.
• Where the qualifying beneficiary's business is carried on through a partnership, cessation includes the beneficiary leaving the partnership or the partnership itself ceasing to trade.