My husband and I own (50:50) the building from which our personal company trades and we both work in the business. The shares in the company are owned 99:1 in favour of my husband. As currently structured, on sale of the building, my husband will benefit from BADR; however, I won't (because I don't own more than 5% of the shares, etc.). If my husband transfers some of his shares to me (no gain/no loss) so my holding becomes 5%, will I be entitled to BADR? I'm assuming that the gain will need to be apportioned according to the length of time during which I have been a 5% shareholder, and then BADR will be applied to that proportion only (and not to the remaining proportion). Is this correct? 

Arthur Weller replies:  

If your husband transfers 4% of the shares in the company to you, so that now you own 5% of the shares in the company, this will only be effective if you own the 5% shares for two years before sale. However, owning the 5% shares for less than two years will not allow you any relief. It is not time apportioned.