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The Finance Act 2015 changes were intended to prevent Entrepreneurs‚ Relief being claimed on contrived structures that were outside the policy intent of the relief. The changes focused on three main areas; joint ventures and partnerships, associated disposals and goodwill on incorporation. The breadth of the changes meant that Entrepreneurs‚ Relief was denied for some business owners that are carrying out genuine commercial activities of the type that Entrepreneurs‚ Relief is designed to promote.
The CIOT and the ICAEW have led stakeholder engagement with HMRC in considering the detailed technical changes that were needed to reverse the unintended consequences of the Finance Act 2015 changes.
The CIOT and the ICAEW Tax Faculty have been pleased to play a leading role in the very constructive and collaborative engagement with HMRC that has led to the changes announced in the Budget yesterday. Both the stakeholder group and HMRC have worked very hard to resolve the unintended consequences while ensuring that the relief is used in the way the government intends.
It is particularly helpful that the proposed amendments to the legislation will take effect from the date(s) of the original FA 2015 measures thereby ensuring that taxpayers who were caught out by the unintended effects will no longer be adversely affected.
The changes are announced in the Red Book at paras 2.189 to 2.191 with further detail in separate papers:
Goodwill on incorporation
Joint ventures and partnerships
We look forward to continuing our engagement when the detailed draft clauses are published next week.
 Para 3.92 of the Blue Book