Entrepreneurs Relief

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Entrepreneurs’ Relief allows individuals and some trustees to claim relief on qualifying gains made on the disposal of any of the following:

  • all or part of a business
  • the assets of a business after it has stopped trading
  • shares in a company

The relief applies for the years 2008-09 onwards. There is a maximum lifetime limit of Entrepreneurs’ Relief you can claim.

Who qualifies?

The relief is available for you as an individual if you:

  • are in business, for example as a sole trader or as a partner in a trading business
  • hold shares in your personal trading company

See the glossary links below for more on personal and trading companies.

The relief is also available for some trustees.

Entrepreneurs’ Relief is not available for companies.

Find out more on personal companies in the glossary

Find out more on trading companies in the glossary

Conditions you must meet

Depending on the type of disposal, you need to meet certain qualifying conditions throughout a qualifying year.

For example, you must have owned the business during the year that ends:

  • on the date your business was disposed of – if you’re selling all or part of your business
  • on the date your business ceased – if your business has ceased

The maximum lifetime limit

There’s a maximum lifetime limit on the amount of Entrepreneurs’ Relief you can claim on qualifying gains. The limit is:

  • the first £1 million from 6 April 2008 to 5 April 2010
  • the first £2 million from 6 April 2010 to 22 June 2010
  • the first £5 million from 23 June 2010
  • the first £10 million from 6 April 2011

How the relief works

You can make claims for Entrepreneurs’ Relief on more than one occasion. The total qualifying gains in all your claims must not exceed the lifetime limit.

Capital Gains Tax is due at 10% on all qualifying gains up to the maximum lifetime limit.

Example

Mrs T stopped trading and in July 2013 sells an asset of the trade making a gain of £75,900.

The gain qualifies for Entrepreneurs’ Relief, and she has no other gains or losses.

Capital Gains Tax is due on £65,000 (£75,900 less Annual Exempt Amount £10,900).

At the Entrepreneurs’ Relief rate of 10% her Capital Gains Tax due is £6,500.

Read about Capital Gains Tax rates and allowances

Download the latest helpsheet on Entrepreneurs’ Relief – Helpsheet 275 (PDF 134K)

See a step-by-step guide to working out your gain or loss

 

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