News & Events
Prior to the Budget on 11 March 2020, it was widely suggested that the Chancellor would abolish Entrepreneurs’ Relief. The relief grants a lower rate of capital gains tax (10%) to be applied to gains made on the sale of business assets and shares in personal companies.
HMRC believed there to be evidence that Entrepreneurs’ Relief had primarily benefited a small number of affluent taxpayers and had done little to generate additional entrepreneurial activity.
However, instead of abolishing relief, the Chancellor announced that the relief would be restricted to £1m of lifetime gains (previously this figure was £10m). Gains above that figure would be taxed at the normal CGT rates.
For company owners selling the shares in their personal company there are conditions to be met to obtain the relief, being:
- the entrepreneur has to have owned at least 5% of the
- they must be an employee or director of the
- the company must be a trading company; and,
- the above conditions must be met for at least two years before the sale.
None of these conditions were altered in the 2020 Budget announcement, however, the conditions are widely and professional advice should be taken when considering eligibility.
If you are considering selling your company, our team is on hand to liaise with you or your advisors. Please get in touch with your usual Andrew Jackson contact, call (01482) 325242 or email firstname.lastname@example.org