New announcement. Learn more

CHARTERED ACCOUNTANTS (ICAEW)

News and advice to help make your property business a success

LANDLORDS FINANCIAL BLOG

All

Landlords Tax Property Tax Landlords Tax Returns Landlords Accounts Property Tax Return Property Accounts Landlords Financial Landlords Accountant Tax Returns Tax Chartered Accountants Online Accountant Online Bookkeeping Online Tax Returns Your Online Accountant Your Online Bookkeeper VAT Businessadvice HMRC Accounting Cashflow Dividends Expenses PAYE Property Property Accountant Smallbusiness Businesstips Capital Gains Tax FHLs Furnished Holiday Lettings Ihtexemptions Income Tax Inheritance Tax NIC SDLT Taxplanning Cgt Investment Property Tax Landlord Repairs Pension Property bookkeeper Property Letting Tax Relief Taxreturn VAT invoice Allowable Business Expenses Annual Exempt Amount Bad Debt Tax Relief Business Expenses Business Rate Capital Allowances Capital Gains Capital gains tax property Cashbasis Child Benefit Compliance Deductibleexpenses Disincorporation Employment Allowance Finance Financialmanagement Gifts HMRC complaints Holiday Lets Tax ISA Lettings Making Tax Digital MakingTaxDigital Mileage Allowance Mobilephones National Insurance Overlaprelief Partnership Partnershipbusinesses Ppr Property Company Tax Property Tax Deductible Expenses Propertyallowance Reimbursedexpenses Rent a Room Relief Rental Residence Relief Small Business Tax free income TimetoPay 60 day capital gains limit Abolitionclass2 Accrualsbasis Acquisitions Advisoryfuelrates AI AirBnB Alphabet shares Amap Annual Tax on Enveloped Dwellings Appeal Artificial intelligence Assessment Asset disposal Associated Company Associated Company Tax Rules Autumnstatement Bad Debt Baddebts Badgesoftrade BADR Beancounter Benefits in Kind Breakeven Point Budget Business advice Business asset deferment Business coach Business Continuity Business Entertainment Business Rates Business Rates Relief Business tips Businessgrowth Businesstypes Buy or Lease Equipment Buytolet Capital Allowances for Cars Capital Gain Capitalallowances Capitalexpenditure Car Capital Allowances Carry Back Losses Change of Tax Basis ChatGPT CIS Scheme Class 2 NIC Common Tenant Companies Expenditure Companies House Company Account Deadlines Company Account Filing Company Strike Off Company Tax Efficient Property Companyassociation Companyloanstaxfree Compulsory Strike Off Construction Industry Scheme Contacthmrc Contentmarketing Contributions Corporation Tax Losses Corporation Tax New Regime Corporation Tax Rates CorporationTax Costs Cryptocurrency Customerlistimplications Deductible Business Expenses Deductions Demerger Depreciation Development Directors Directors Loans Directorsloans Disallowable Business Expenses Discovery Dividend allowance Dividend Allowance Reduction Dividend Planning Dividendallowance DLA Domestic Items Tax Relief Dormantcompany EIS Employee Discount Employee management Employeecompensationpayments EmployeeOwnershipTrust Endoflifeplanning Enquiry EnterpriseResourcePlanning Entertainment Entrepreneurmindset Equity Expenses Allowed For Tax Extrabenefit Eyetests Flat Rate Scheme Flipping Furnished Holiday Lets Tax Gift Aid Gift Allowance Growthhacks Help to pay tax bills HICBC HMO Licensing Fees Holdoverrelief Holiday Lettings Tax How to apply for a Business Loan How to Extract Profit Humour Hybrid Illegaldividends Income Income and Gains Inflationary Gains Influencers Inheritance Tax Nil Rate Band Interest Rates Interestrelief Interestrestriction IR35 Joint Tenant Keypersoninsurance Landlords Self Assessment Late vat registration LBTT Leadgeneration Leadmagnet Leanbusinessmodel Letting Agent Disbursements Letting Agent Recharres Lettings Relief Lifetime Limit Limitedcompany Liquidation Demerger Loaninterest Long Lets Tax Longservice LTT Mainresidencerelief Managed Lets Management accounting Maritalhomedivorce Marriage allowance Marriageallowance Mileage payment Minimumwage Mixedusesdlt Mortgage costs Mortgage Interest Relief New property Newcompanycarfuelrates Newnicrules NIC 2023 to 2024 NIC savings Nicdisregard Nicreduction NMW Nmwerrors Non Allowable Business Expenses Non-taxable Nudgeletter Optiontotaxvat Overpayment Relief Overseas properties Paperform Partnership schemes Parttime Patternofoccupancy PAYE by Direct Debit Payrolling Penaltypoints Pension Payments Tax Relief Pensioncontributions Pensions Performance-reviews Periodofgrace Periodsofabsence Personal Expenses Personal finance Personalallowance Personalguarantees Postcessationrelief Pretradingexpenses Profit Profit-and-loss ProfitAndLoss Property Allowance Property Development Company Property Incorporation Property Investment Company Property investor accounts Property investor tax tips Property Rental Business Property Trading Propertycompany R40 Recharges by Estate Agents Regularpayments Relief Rent your drive Rentaroom Research & Devolopment Residential property gains Residentialsdlt Retail stock control Retainedprofits Revenue Room for rent tax Rti SA Salary Savings SDLT changes Section 455 Tax Section455tax Selective Licences Landlords Self Assessment Self-employednic Selfemployed Selling Online Seperation Servicecharges Settlementslegislation Simplified Expenses Smallbiz Smallbusinessraterelief Software Sole Trader Spring Budget Staffparties Stamp duty Student Loan Deductions SuccessJourney Tax Allowance on Driveways Tax Allowances Tax Break Tax Codes Tax Deadlines Tax Deductions Tax Filing Deadlines Tax Free Childcare Tax Implications Tax on Company Vans Tax position Tax Refund Tax tips for landlords Taxbillpayments Taxconsequences Taxincentives Taxposition Taxpositionassets Taxrelief Taxreliefs Taxses Terminationpayments Tips Trade professional Trading losses Training Transfer Assets Transfer Assets Between Spouses Umbrellacompany Undisclosedincome Unpaid Rent VAT Bad Debt Relief VAT Deadlines VAT Disbursements VAT Penalties VAT registration VAT Reverse Charge Vatpenalties Vatregistered Vatregistrationthreshold Wellbeing Working from home

TAGS

Business Asset Disposal Relief – Have you exceeded the limit?

August 1, 2023

Business Asset Disposal Relief – have you exceeded the limit?

HMRC have sent out nudge ‘One to Many’ letters to taxpayers who they believe may have claimed Business Asset Disposal Relief (BADR) in excess of the £1 million lifetime limit.

Nature of the relief

Formerly known as Entrepreneurs’ Relief, BADR reduces the amount of capital gains tax that is payable where a person sells all or part of their business. Where the relief applies, capital gains tax is charged at the rate of 10% on all gains on qualifying assets up to the level of the lifetime allowance, currently set at £1 million.

To be eligible for the relief, you must meet the qualifying conditions for a period of two years up to the date on which you sell your business or, where the business is operated as a limited company, your shares in the company.

The letters

The letters have been sent to taxpayers who made claims for BADR relief in their 2021/22 Self-Assessment returns and who HMRC believes have claimed BADR in excess of the £1 million lifetime limit, either because the limit had already been reached prior to 2021/22 or because the claim made in the 2021/22 tax return took the value of lifetime claims over the limit.

Taxpayers who received a letter and who had claimed BADR to which they were not entitled had 30 days in which to amend their tax return. As a result of the amendment, it is likely more tax will be due – in the absence of the relief a higher rate taxpayer would pay capital gains tax at 20% on the gains rather than 10%.

Taxpayers who think that their claim is within the £1 million limit should contact HMRC and explain why they think this is the case.

Anyone who receives a nudge letter should address it – HMRC may instigate a compliance check if the taxpayer has not amended their return or contacted HMRC. If a response remains outstanding, this should be addressed as a matter of urgency.

Keep records

If you have claimed BADR, it is important than you keep a record of claims made. It is prudent to check future claims against the remaining limit to ensure that lifetime claims are within the lifetime limit.

Asset disposal

Landlords Tax

Landlords Accounts

Landlords Tax Returns

Property Tax

Property Accounts

Property Tax Return