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Please refer to the Entrepreneurs' Relief information page for more information about the relief. This topic shows you how to calculate entrepreneurs' relief on a capital gain through IRIS Capital Assets.
Please refer to the quick guide How to enter an asset for help with creating and selling assets.
To enable the entrepreneurs' relief calculation on the disposal of an asset:
Highlight the Assets option on the left-hand side of the Capital Assets screen.
Select the asset that you wish to calculated entrepreneurs relief on.
Click Dispose.
Ensure the correct asset is highlighted at the top of the screen.
For a new disposal; Input the new disposal details and select the Entrepreneurs' Relief option and click Add.
For an existing disposal; Select the disposal you wish to edit, select the Entrepreneurs' Relief option and click Update.
Please refer to the quick guide How to enter a shareholding for help with creating shareholdings and inputting operative events.
To enable the entrepreneurs' relief calculation on the disposal of a shareholding:
Highlight the Shareholding option on the left-hand side of the Capital Assets screen.
Select the holding that you wish to calculated entrepreneurs' relief on.
Click Events.
Ensure the correct holding is highlighted at the top of the screen.
For a new disposal; Click Add to input the new disposal event details, select the Entrepreneurs' Relief optionand click OK to save.
For an existing disposal; Select the disposal event and click the "Edit" button, select Entrepreneurs' Relief option and click OK to save.
The Other Capital Gains area of Capital Assets allows you to input a manually calculated gain. Exclude the entrepreneurs' relief calculation from you manual calculation to ensure the computation and tax return are completed correctly.
When creating an entry in Other Capital Gains simply select the Entrepreneurs' Relief option and the software will calculate the relief automatically on the Capital Gains computation.
Details of the relief calculation are included on the Capital Gains Tax computation where the Entrepreneurs' Relief box has been selected; the computation will automatically tax the qualifying gain at 10%.
(Prior to 23rd June 2010 it would deduct the relief as 4/9ths of the total gain). The relief is limited to £10,000,000 for gains after 6th April 2011 (£5,000,000 between 23/06/10 and 05/04/10, £2,000,000 from 06/04/10 and £1,000,000 from 06/04/08 to 05/04/10) on any single gain or spread over multiple gains for a single tax year.
IRIS Personal Tax and IRIS Trust Tax include the deduction of Entrepreneurs’ Relief within the appropriate Tax Return.
IRIS Personal Tax and IRIS Trust Tax also have the option of producing the Entrepreneurs’ Relief Claim Form (HS275) to be used if the claim is not being made on the Tax Return.
The entrepreneurs' relief options outlined above are only available on disposals dated on or after 6th April 2008.
IRIS will restrict the amount of gains to £10m on which entrepreneurs' relief can be calculated for the selected tax year; at present IRIS is not capable of retaining the gains on which entrepreneurs relief has been calculated for future tax years.
At present IRIS is not capable of including entrepreneurs' relief claimed on gains where the individual is a beneficiary from a trust when limiting relief claims to £10m on the gains.
Losses associated to the disposal of a qualifying business must be deducted from the gain before you create the entry in IRIS.
Bob has built up his trading business since starting to trade in January 2004 and in October 2008 he decides to sell the whole lot for £500,000. The goodwill of the business has been valued at £300,000 and the shop that cost him £250,000 in 2004 was included in the sale at a loss for £200,000 giving an overall net gain of £250,000; he has made no other claims to entrepreneurs' relief and the whole of the gains are eligible. Bob has no other allowable losses and no other gains in the year.
Highlight the Assets option on the left of Capital Assets
Click Add and create a new asset:
Date Acquired: 01/01/2004
Amount Paid: £250,000
Tick Disposal and enter:
Disposal Date 01/10/2008
Disposal Value £500,000
Tick Entrepreneurs' Relief
Click Add & Close to save the disposal
Click OK to save the asset.
Reports | Capital Gains Computation shows the gain calculation with the Entrepreneurs' Relief deduction being calculated.
Highlight the Other Capital Gains option on the left of Capital Assets
Click Add and create a new entry:
Date of acquisition: 01/01/2004
Date gain arose: 01/10/2008
Proceeds: £500,000
Net gain (-loss): £250,000
Tick Entrepreneurs' Relief
Click OK to save.
Reports | Capital Gains Computation shows the gain with the Entrepreneurs Relief deduction being calculated.