When an individual disposes of an asset at a gain, capital gains tax may be due. Ordinarily, for gains falling above the higher rate threshold this will be charged at a rate of 20%. However, if entrepreneurs’ relief (ER) is available, the rate will be reduced to 10%.
ER is applicable where individuals or trustees make “qualifying business disposals”, and can be claimed in respect of gains of up to £10 million over the course of a lifetime. At today’s capital gains tax rates, it can result in a potential tax saving of up to £1 million per person, so it is a valuable relief that should be secured wherever possible.
Please use the link above to download our entrepreneurs’ relief flyer.