entrepreneur relief question aat level 4 2016

Jamesw Registered Posts: 2
hi can somebody help me with this question please?

Ranjit sold a business in July 2012 and made a gain of £7,500000
in Feb 2017 sold another business making another gain £4,000000

Neither of these business are residential properties

Ranjit used her annual exemption on other capital disposals.

How much capital gains tax on the disposal Feb 17.

The answer is £550,000 but I dont understand how! can you help?


  • PeterC
    PeterC Registered, Tutor Posts: 236
    Entrepreneur's relief on £10m, less the £7.5m in 2012, leaves £2.5m
    CGT 10% x £2.5m = £250,000
    This leaves £1.5m (£4m - £2.5m)
    There is no basic rate band left, it has been consumed by the £2.5m
    GCT 20% x £1.5m = £300,000

    250,000 + 300,000 = £550,000
  • jimbo123
    jimbo123 Registered Posts: 5
    edited September 2017
  • PeterC
    PeterC Registered, Tutor Posts: 236
    Old transactions are relevant because the £10million relief has to cover your whole lifetime.
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