Taxation of Chargeable Gains Act 1992 section 169S

Interpretation of Chapter

Section 169S provides the key definitions and interpretation rules used throughout the business asset disposal relief chapter, ensuring consistent application of terms such as "business", "personal company", and other important concepts.

• A "business" must be a trade, profession, or vocation carried on commercially with a view to making profits — hobby or non-commercial activities do not qualify.
• A "personal company" requires the individual to hold at least 5% of ordinary share capital with at least 5% of voting rights, plus satisfy either a 5% entitlement to distributable profits and winding-up assets, or a 5% entitlement to proceeds on a hypothetical sale of all the company's shares.
• The personal company test includes anti-avoidance rules that disregard arrangements whose main purpose is to manipulate whether business asset disposal relief applies, and special rules govern how jointly held shares are attributed to individuals.
• The section also defines numerous other terms used in the chapter, including "trading company", "trading group", "holding company", "qualifying business disposal", "material disposal of business assets", and "relevant business asset", largely by reference to other provisions.