I've been trading as a pharmacy for over 25 years and have a cash balance of substantial retained profits, as much as 80% of annual turnover. I lent £180,000 to a property company of which the directors are 50% shareholders. I want to retire and want to find out if I will be entitled to claim the 10% business asset disposal relief (BADR) rate of capital gains tax? 

Arthur Weller replies:  

If you look at HMRC’s Capital Gains manual at CG64090 you can see that whether BADR (the new name for entrepreneurs’ relief) is available is dependent on whether a substantial part of the company is involved in investment activities. ‘Substantial’ in this context means 20%. The criteria are: (a) income; (b) asset base of the company; (c) expenses of the company; and (d) time spent by the employees. All the criteria are looked at together. It is also possible to get a ruling from HMRC (see CG64100).