Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Capital gains tax definition

What does Capital gains tax mean? Capital gains tax (CGT) is the tax on the profit (chargeable gain) realised when a chargeable asset is disposed of, for example by sale, gift or exchange of shares, land or a business. The concept and computation are statutory: in the UK, principally the Taxation of Chargeable Gains Act 1992; in Ireland, the Taxes Consolidation Act 1997. CGT primarily applies to individuals and trusts. In the UK, companies do not pay CGT; their gains are within corporation tax. In Ireland, companies are generally taxed on chargeable gains under corporation tax, typically at the CGT rate. Key features include an annual exempt...

UK CGT reliefs for trustees—business asset roll-over, incorporation, EIS/SEIS deferral, company reorganisations, and losses on loans to traders

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Practice notes

This Practice Note provides a concise overview of the principal capital gains tax (CGT) reliefs and exemptions relevant to business assets and available to trustees, as well as to individual business owners. It considers the following areas.

CGT reliefs for trustees carrying on a business, namely:

business asset roll-over relief
incorporation relief

CGT reliefs and incentives for trustees as investors, namely:

enterprise investment scheme (EIS) and seed enterprise investment scheme (SEIS)
relief on company reorganisations
relief for losses on loans to traders

EIS and SEIS play a significant role in drawing investment into a business. That said, this Practice Note concentrates on the tax treatment of both schemes for trustees in an investor capacity, ie the EIS income tax and CGT benefits available to an investor.

The reliefs excluded from this Practice Note, but covered in separate Practice Notes, are:

CGT business asset disposal relief (see Practice Notes: CGT—business asset disposal relief (formerly entrepreneurs' relief) and Taxation of trusts—CGT business asset disposal relief (formerly entrepreneurs' relief))
CGT investors' relief (see Practice Note: CGT—investors’ relief)
CGT hold-over relief (see Practice Notes: CGT—hold-over relief for...

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Paul Davies

Clarke Willmott

Paul Davies is a partner in the private client team of Clarke Willmott. He is a solicitor, a chartered tax advisor, and a member of the Society of Trust and Estate Practitioners, as well as being a chartered accountant (albeit no longer practising as such). He specialises in providing advice across the range of different tax and legal issues that face high net worth individuals, executors, and trustees.Paul's work spans all areas of private client work, including wills, trusts of all kind, inheritance tax, succession planning, probate and estate administration, and lasting powers of attorney. Paul acts as a professional trustee for a number of family trusts, and is also regularly called on to act as a professional executor....

Web page updated on 27/05/2026

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