Can I Claim Entrepreneurs’ Relief on Ordinary Share and Preference Share?

I recently sold my 60% share in a trading company that I’ve been a director of for over 20 years. The sale included ordinary shares that had full voting rights, and preference shares, which had no voting or conversion rights, just the right to a fixed dividend. Can I claim entrepreneurs’ relief on the gain arising on both types of shares or just in respect of the gain on the ordinary shares?

 

As you held at least 5% of the ordinary voting shares and were a director of the company for one year up to the date of sale, entrepreneurs’ relief should apply. Although the conditions for entrepreneurs’ relief refer to ordinary voting shares, the gains arising on both the ordinary shares and preference shares can be included in your claim for entrepreneurs’ relief. If the sale was concluded on or after 6 April 2010 the maximum gain that can be covered by entrepreneurs’ relief is £2 million, for sales before this date the maximum gain that can be subject to an entrepreneurs’ relief claim is £1 million.

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