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Entrepreneurs’ Relief – Spring Statement 2018

At present, entitlement to the special 10% rate of capital gains tax may be lost when an entrepreneur’s company issues new shares and as a result causes their personal stake to fall below 5%. A proposal announced at Autumn Budget 2017, will allow an individual in this position to elect to be treated as if they had disposed of their shares and reacquired them at their market value just before the time the company issued new shares. The individual may claim Entrepreneurs’ Relief on that gain either at the time of election, or on a future disposal of shares.

The consultation document, entitled Financing growth in innovative firms: allowing Entrepreneurs’ Relief on gains before dilution, sets out the proposed changes in more detail, and invites views on how they will work in practice.

The consultation will run until 15 May 2018.

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