HMRC has updated its CGT manual following the amendments made to the definition of a “personal company” for the purposes of disposals made on or after 29 October 2018.

The updated guidance now reflects the further amendments made over the Christmas period to the new economic interest requirement for entrepreneurs’ relief (ER) on share sales introduced by the Finance Act 2019, such that – in order to access ER – as well as holding 5% of the ordinary share capital and 5% of the voting rights the shareholder must either:

•   be beneficially entitled to at least 5% of the company’s distributable profits, and 5% of its assets available for distribution to “equity holders” in a winding up, or

•   in the event of a disposal of the ordinary share capital of the company, be beneficially entitled to 5% of the disposal proceeds.

The revised HMRC guidance can be viewed here and here.