In the First Tier Tribunal case of TC03273: Jeremy Rice, a car salesman was allowed to claim Entrepreneur’s Relief on the sale of his premises when he closed his business and started up elsewhere. The relief was claimed on the basis that it was a sale of a business asset within three years of cessation of trade.

The key issue for the tribunal was whether or not there had been ‘cessation’ of trade rather than ‘organic growth’.

The original business was selling sports cars from a lot on a busy road in Peterborough with no internet presence, relying on passing trade.  Mr Rice sold this business due to vandalism.

He then started up a new business selling family cars.  He did not have a visible lot, due to planning restrictions.  He sold via the internet by appointment only.

The Tribunal held that the vandalism was an external factor, and therefore not ‘organic change’.  The businesses were also of a completely different character.

The Tribunal agreed with Mr Rice that his original business had indeed ceased and that, given the premises were sold within three years, entrepreneur’s relief was available to reduce the Capital Gains Tax (CGT) payable.