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ENTREPRENEUR'S RELIEF EXTENDED

Entrepreneur's Relief (ER) has now been extended to external investors in unlisted trading companies. If available, it reduces the investors capital gains tax liability from 20% to 10%.

The extension to ER, introducing investors relief, will apply to gains accruing on the disposal of certain qualifying shares by individuals (other than employees and officers of the company). In order to qualify for entrepreneur's relief, a share must:

- be newly issued, having been acquired by the person making the disposal on subscription for new consideration

- be in an unlisted trading company, or unlisted holding company of trading group

- have been issued by the company on or after 17 March 2016 and have been held for a period of three years from 6 April 2016

- have been held continually for a period of three years before disposal The rate of capital gains tax charged on the qualifying gain will be 10%, with the total amount of gains eligible for investors relief subject to a lifetime cap of £10 million per individual. This lifetime cap will apply in addition to lifetime ER allowance. The rules will also apply to qualifying beneficiaries of trusts.

For further details on entrepreneur's relief, please contact Julie.Jarvis@affordbond.com