The short version: Entrepreneurs’ Relief (now called Business Asset Disposal Relief) reduces the Capital Gains Tax you pay when you sell all or part of your business. Instead of paying CGT at the normal rates, you pay a reduced rate on qualifying gains.
Who can claim it?
You might qualify if you’re a sole trader selling your business, a company director or shareholder selling shares (if you own at least a certain percentage), or if you received shares through an EMI scheme. You need to have owned the business or shares for at least two years before selling.
How much can you claim?
There’s a lifetime limit on how much gain you can claim the relief on. Once you’ve used up your allowance across all qualifying disposals, you pay the normal CGT rates on anything above that. The limit has changed over the years, so check gov.uk for the current figure.
How do you claim?
You claim through your Self Assessment tax return or by filling in the relevant HMRC form. Make sure you claim, it’s not automatic.
Selling your business and want to make sure you’re claiming everything you’re entitled to? Talk to us before you finalise anything.
