t: 01633 240080,  f: 01633 240081

24 Bridge Street, Newport NP20 4SF

Eligibility to claim Entrepreneurs’ Relief

Source: HM Revenue & Customs | | 02/10/2018

Entrepreneurs' relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where this relief is available Capital Gains Tax (CGT) of 10% is payable in place of the standard rate. CGT on the disposal of chargeable assets is usually chargeable at 20%. There are a number of qualifying conditions that must be met in order to qualify for Entrepreneurs' Relief.

When the relief was first introduced there was a lifetime limit of £1 million for gains. This was increased to £2 million from 6 April 2010, to £5 million from 23 June 2010 and to a generous £10 million from 6 April 2011. This is a lifetime limit that means individuals can qualify for the relief more than once, subject to an overriding total limit of £10m of qualifying capital gains. There are time limits that must also be met to make a claim.

The relief is available to individuals as well as some trustees of settlements. To qualify the individual should be either an officer, or employee of the company and own at least 5% of the company and have at least 5% of the voting rights. There are also other qualifying conditions that must be met in order to qualify for the relief.

Entrepreneurs' Relief is an important and valuable tax relief for qualifying business owners. There is also a sister relief called Investor’s Relief which has a separate £10 million lifetime cap. This is useful for investors who do not meet the officer or employee requirement for Entrepreneurs' Relief. There is a separate lifetime cap of £10 million for qualifying gains by investors.



 

Latest News

  • Gifts out of disposable income

    12/02/2019 - More...

    There is an annual Inheritance Tax exemption of £3,000 for gifts. This exemption can also be carried forward to the following tax year if not used to make a maximum gift of £6,000.

  • What work is covered by the CIS scheme?

    12/02/2019 - More...

    The Construction Industry Scheme (CIS) is a set of special rules for tax and National Insurance for those working in the construction industry. Businesses in the construction

  • When do you pay Capital Gains Tax?

    12/02/2019 - More...

    Capital Gains Tax (CGT) is normally charged at a simple flat rate of 20% and this applies to most chargeable gains made by individuals. However, if you only pay basic rate tax and

Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the newsletter
» Login

 

Copyright © 2019 Haasco Limited (Company registration 7030921). Registered to carry on audit work in the UK and regulated for a range of investment business activities by the Institute of Chartered Accountants in England and Wales (Firm C003118150). Indemnity insurer - Axis Speciality Europe SE (Policy 374997016)

Cookie Policy | Privacy Policy