Taxation of Chargeable Gains Act 1992 section 169I

Material disposal of business assets

Section 169I defines what constitutes a "material disposal of business assets" for the purposes of Business Asset Disposal Relief (formerly Entrepreneurs' Relief), setting out the types of qualifying disposals, the ownership and employment conditions that must be met, and special rules for EMI shares and partnerships.

• A material disposal can be of a whole or part of a business, of assets used in a business that has ceased, or of shares or securities in a company, provided the individual has owned the business or met qualifying conditions for at least 2 years
• For share disposals, one of four conditions (A, B, C or D) must be satisfied, relating to personal company status, trading company status, officer or employee status, and — for EMI shares — the date the option was granted
• Where an individual has transferred a sole trade business to a company in exchange for shares, the period of prior business ownership can count towards the 2-year qualifying period
• Partnership interests are treated as ownership of the underlying business, so partners can qualify for relief on disposals of their partnership interests or when the partnership itself disposes of the business