What is Entrepreneurs' Relief?

If your business was not successful and you decided to move on, the good news is that you may gain a benefit called Entrepreneurs' Relief.

It's one of the most attractive tax reliefs in UK:

  • 10% CGT on qualifying assets
  • £10,000,000 lifetime gains.

How do I calculate Entrepreneurs' Relief?

  1. Add together the capital gains, deduct losses, and work out the total taxable gain eligible
  2. Next deduct your tax-free allowance
  3. You pay 10% tax on what’s left.

What businesses are eligible?

  • Sole trader businesses
  • Partnerships
  • Limited companies.

Also, the company’s main activities are in trading (as opposed to things like financial investment).

What is the One Year rule?

  • you’ve owned the business for at least one year before the date you sell it, or
  • you’ve been with the company for at least a year if you're selling shares, or
  • if your shares are not EMI shares, you were given the option to buy them at least one year before you’re selling them.

Is Entrepreneurs' Relief available for EMI shares?

If you got your shares through the Enterprise Management Incentive Scheme, you must have at least 5% of shares and voting rights in the company to qualify.

What if I'm selling assets that I loaned to my company?

Then both the below criteria must apply:

  • you sold at least 5% of your shares in a company (or part of partnership)
  • you owned the assets but let your business partnership or company use them for at least one year up to the date you sold (or closed) the business or sold the shares.

How do I claim it?

Either:

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