Entrepreneurs are going Interstellar

Posted on: August 13th, 2018

Fareham Innovation Centre recently hosted 18 space-related innovation projects selected from nearly 70 concepts submitted to the OI Space Incubator programme.

Ten were ultimately short-listed to receive an incubation package of support worth more than £12,000 each. Thorough testing of the projects included technological feasibility, commercial viability and market-positioning.

Richard May, the OI Space Incubator programme manager spoke to Andrew Ross from the Southern Daily Echo who initially reported on the event.

 

The programme helps us grow a space sector cluster in both Fareham and Bordon alongside the aviation, marine, logistics, agri-tech, big-date, smart city and gaming business we already support in Hampshire.

 

Hand in hand with an expanding business comes the matter of Capital Gains Tax (CGT). On the disposal of all or part of a sole trading or partnership business, a CGT rate of 10% is applied to any gain made where the owners’ taxable income falls below the basic rate bank upper limit and 20% on the balance.

The aspiring business men and women attending the programme may be entitled to a further relief which caps CGT on the balance at 10% known as Entrepreneurs’ Relief (ER).

ER applies to gains made on disposals by individuals of the following:

Shares in or securities of a trading company

  • The individual making the disposal must own at least 5% of ordinary share capital
  • These shares or securities must carry voting rights
  • There is a minimum period of ownership of the shares of least one year prior to the disposal
  • The individual must be an officer or employee of the company at the time of the disposal and during the one year ownership of the shares prior to the disposal
  • The 5% minimum ownership requirement is not required where the disposal is of shares acquired after 5th April 2013 under Enterprise Management Scheme (EMI) options
  • An investment business will not qualify

The transfer of the whole or part of a business

  • The disposal must be made by a sole trader or business partner who owned the business for a minimum period of one year prior to sale

Assets in use on the cessation of a business

  • The business must have been owned by the individual throughout period ending in date of disposal; and
  • The business ceased trading within 3 years ending in date of disposal

Associated disposals of personal assets

  • Assets lent to the business can also qualify for ER provided at least 5% of your shares or business partnership are sold and the loan period was at least one year at the time of disposal

If you are a trustee selling assets that satisfy the criteria above, you may also qualify

The relief is not given automatically, but must be claimed either through your Self Assessment Tax Return or by completing Section A of the ER Helpsheet.

There is no limit on how many times you may claim Entrepreneurs’ Relief, however, there is a lifetime cap on the relief of £10 million.

ER is a complex but vital tax saving tool, the nuances of which are beyond the scope of this article. If you own a business, you should ensure that it qualifies for the relief.

To download our entrepreneurs fact sheet click here.