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We are sharing this update from ACCA, our professional body, for the interest of clients and contacts. The content is (c) ACCA

HMRC targeting population of taxpayers who have claimed more than the £1m lifetime limit for Business Asset Disposal Relief 

The Wealthy External Forum is a joint forum between HMRC’s ‘Wealthy’ Teams and professional bodies representing ‘Wealthy’ individuals. It has published this briefing.

The Wealthy External Forum is leading on a project regarding a population of taxpayers where our information shows they have claimed more than the £1m Lifetime Limit for Business Asset Disposal Relief (previously known as Entrepreneurs’ Relief).

We will be asking customers to amend their return to bring them back below the limit.

General feedback can be directed to the External Forum mailbox. Contact details will be available in the letters for any customer or agent queries.

The details

The taxpayers identified through this project have included a claim for Business Asset Disposal Relief and had either already gone over the £1m limit prior to their 2020 to 2021 return, meaning nothing can be claimed in this return, or have now gone over the limit and the claim needs to be reduced to take it to the £1m limit or below.

During May HMRC is sending a letter to approximately 900 individuals in this population to advise them that our information shows that they have exceeded the Lifetime Limit and as such they need to check their self assessment return for 2020 to 2021.

We will ask these customers to check their 2020 to 2021 return and if there has been an error to amend their return. If they are happy that the information held is correct, we are asking for an email to be submitted confirming this. If customers do not respond, HMRC will consider their cases further and may amend the claim under 9zb.

Other relevant information

Download a copy of the letter.