Source: HM Revenue & Customs | | 23/03/2016
Entrepreneurs’ relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where entrepreneurs’ relief is available, CGT of 10% is payable in place of the standard rate. There are a number of qualifying conditions that must be met in order to qualify for the relief. The lifetime limit means that individuals can qualify for the relief more than once, subject to the overriding condition that the standard rate of CGT will be charged once the total amount of qualifying capital gains exceed £10 million.
In the 2016 Budget, the Chancellor announced that entrepreneurs’ relief is to be extended to external investors in unlisted trading companies. This new investors’ relief will apply a 10% rate of CGT to gains accruing on the disposal of ordinary shares in an unlisted trading company held by individuals, that were newly issued to the claimant and acquired for new consideration on or after 17 March 2016. The shares must be held for a period of at least three years starting from 6 April 2016 to qualify for the relief. A person’s qualifying gains for this investors’ relief will be subject to a separate lifetime cap of £10 million.