Max ceased trading two years ago, and is now about to move overseas. He would like advice on the capital gains tax (CGT) implications of the disposal of two assets previously used in his unincorporated business.

Max:
– Has always been UK resident and domiciled.
– Is widowed and has one daughter, Fara.
– Is a higher-rate taxpayer.
– Makes disposals each year to use his annual exempt amount for capital gains tax.

Max – unincorporated business:
– Max operated as a sole trader for many years, but ceased trading on 31 May 2016.
– Max still owns office premises and a warehouse which had been used exclusively in his business until 31 May
2016.
– Max now wishes to dispose of these buildings prior to moving overseas.

Proposed gift of the office premises:
– Max is proposing to gift the office premises to Fara on 30 June 2018.
– Max acquired the premises on 1 April 2010.
– Since 1 June 2016, the premises have been let to an unconnected company.
– The market value of the premises in June 2018 is £168,000, which exceeds the original cost.

Proposed sale of the warehouse:
– The warehouse was acquired on 1 August 2014 for a cost of £72,000.
– On 1 December 2013, Max had sold a small showroom for proceeds of £78,000, which gave rise to a chargeable
gain of £16,000.
– Max made a claim to defer the gain against the acquisition of the warehouse.
– Max has received an offer of £84,000 for the immediate sale of the warehouse in June 2018.
– An alternative buyer has offered £90,000 for the warehouse, but will not be able to complete the purchase until
June 2019.

Required:
(c) Explain whether or not entrepreneurs’ relief will be available on the sale of the warehouse, and calculate the increase in Max’s after-tax proceeds if he sells the warehouse in June 2019 rather than in June 2018.
(6 marks)