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- Creative Tax Reliefs
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- Early Career Programmes
- Early Stage To SME- WHAT OUR CLIENTS SAY
- Ecommerce
- Eddie Latham & PJ Scott – Co-founders, Velocity Commerce
- Education
- EMPLOYMENT TAX
- EMPLOYMENT TAXES – MAXIMISING COMPLIANCE AND MINIMISING EMPLOYMENT COSTS
- FAQS
- Financial Compliance
- Financial Reporting
- Find Us
- Flexible ‘Finance Bench’
- Future Events
- Galahad Clark – Founder VivoBarefoot
- Gated Content Landing Page
- Getting Ready For Sale
- Getting Ready For Your First Audit
- GLOBAL TALENT PROGRAMME
- GRADUATES
- Helena Hills – Founder & CEO, TrueStart
- HIGH GROWTH LOW DOWN
- Homepage
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- Hub CP
- HUB CP – Justin Harling Snippets
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- In Their Words
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- Inheritance Tax
- Intellectual Property & Patent Box
- INTERNATIONAL TAX
- Investment Calculator UK
- James Hyde – Founder & CEO, James and James
- Jay Richards & Cat Agostinho – Co-Founders, Imagen
- Justin Harling – CEO, CAE Technology Services
- LANDLORD
- LEGAL STUFF
- Let’s Stop Calling It R&D V2 Gated
- Life at cooper parry
- Lounge Underwear Webcast
- MAKING TAX DIGITAL
- Management Information and Reporting
- MANAGING AGENTS
- Manufacturing Tax and Advisory
- Marketing Thank You
- Merry Christmas!
- MID MARKET – WHAT OUR CLIENTS SAY
- Mid-Market
- Month and year end support
- New Homepage
- New Hub CP
- New Hub CP Live Lounge
- Newsletter Form
- Newsletter Thank You
- NFP – Video – Nick Simkins
- NFP – Webcast – Bhavesh Patel
- NFP – Webcast – Sarah Chambers
- NFP Webcasts And More
- Not For Profit Audit
- Operational Systems & Technology
- Our People
- Meet the Team
- Meet the Team Retail
- Our People – Big Business
- Our People – Business Tax
- Our People – Capital Allowances
- Our People – Corporate Finance
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- Our People Audit
- Our People Team
- Our Why And Values
- Outsourced Business Services
- Outsourcing
- OVERSEAS EXPANSION
- Past Events
- Paul Richardson – Executive Chairman, Gymshark
- Paul Turton – CEO, Pact Coffee
- PENSIONS AUDIT
- Personal Tax
- Personal Tax Compliance
- Personal Tax: Articles And Plenty of FAQs
- PLACEMENT ROLES
- PLACEMENTS
- Preference Centre
- PRIVACY POLICY
- Private Equity Advisory
- PROPERTY AND LANDLORDS
- R&D Capital Allowances
- R&D Gated Form
- R&D Newsletter Thank You
- R&D Tax Credits Questionnaire: Are you eligible?
- Raise investment or debt
- Raising Finance
- Read All About It
- Rebelution 2
- Rebelution 2 Top Tips – Cooper Parry Corporate Finance
- Rebelution 2 Top Tips – Cooper Parry IT
- Rebelution 2 Top Tips – Cooper Parry Wealth
- Rebelution 2 Top Tips – CP Futures
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- Research & Development Tax Credits
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- Retail
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- Retail Rocks 2021 Content
- Retail Tax
- Rob Law MBE – Founder, Trunki
- Scale Up & High Growth
- SECURITY POLICY
- Service Charge
- Service Page Form
- Service Test
- SETTING UP BUSINESS IN THE UK
- SHARE INCENTIVES AND REWARD
- SHAREHOLDER TAX ADVICE
- Shaun Doak – CEO, React Group Plc
- Small Business
- SNAPSHOT
- Strategy & Culture Outsourcing
- Succession Planning
- SUSTAINABILITY
- Tax – What our clients say
- TAX COMPLIANCE SERVICES
- Tax Services
- TAX SETTLEMENTS AND INVESTIGATIONS
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- Test Form
- Test2
- The Process. Tried. Tested. True
- This Is Us
- Tom and Tina Warner – Co-Founders, Warner’s Distillery
- Transaction Deals
- Transaction Services
- Transaction Services – What Our Clients Say
- TRANSACTION TAX
- TRANSFER PRICING
- Trusts and Estates
- UK support for International groups
- VAT SERVICES
- Virtual Bookkeeping
- Virtual FD
- We Get You. A High Growth Mindset To Match Yours
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The draft Finance Bill 2019 includes changes to the qualifying conditions for Entrepreneurs’ Relief. As we explained in our previous blog, the original draft legislation was messy. It was also published without any detailed guidance from HM Revenue & Customs (HMRC) to suggest how it should be applied in practice.
Initial concern
This lack of clarity provoked a lot of debate and concern; in particular, for holders of “alphabet shares”. On a first reading, the new rules suggested that they may no longer qualify for Entrepreneurs’ Relief and the tax liability on a sale of their shares could double.
Following this, our approach was not to jump to conclusions based on draft legislation which lacked any guidance. HMRC had stated that fewer than a thousand taxpayers would be affected by the changes. So, if the many thousands of holders of alphabet shares were to be denied Entrepreneurs’ Relief under the new rules, this would seem to have been unintended.
On reflection, our caution was the right approach. HMRC have since reined it in.
The revised draft rules
As predicted, further amendments have been made to the draft legislation. These changes go some way to tidying things up and narrow the application of the new rules. Holders of alphabet shares who qualified under the previous legislation should still be entitled to claim Entrepreneurs’ Relief where they’re entitled to at least 5% of the total value of the company.
We’re still waiting for HMRC to publish guidance on how the rules should be applied in practice. Once we’ve received this, we’ll follow up with more details on the conditions that need to be satisfied by shareholders who wish to benefit from the Relief when they come to sell their shares.
Where does this leave us?
So, on the face of it, the revised legislation is good news for most taxpayers. But these changes do show that HMRC are targeting those taxpayers who do not have a 5% economic interest in a company. This means certain shareholding arrangements are still likely to be denied Entrepreneurs’ Relief; for example, where the capital rights of shares mean that the holders are entitled to less than 5% of sales proceeds. We’ll follow up with more detail on this soon.
If you’d like to discuss how you may be affected by the changes, please get in touch.

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