{"id":180,"date":"2019-05-29T12:57:07","date_gmt":"2019-05-29T11:57:07","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=180"},"modified":"2023-01-10T14:58:17","modified_gmt":"2023-01-10T14:58:17","slug":"investors-entrepreneurs-relief","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/the-tax-basics\/investors-entrepreneurs-relief\/","title":{"rendered":"How does the Entrepreneurs&#8217; Relief work?"},"content":{"rendered":"\n<p>If you\u2019ve decided to move on from your business for whatever reason, you may be able to take advantage of something called the <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/entrepreneurs-relief\/\">Entrepreneurs\u2019 Relief<\/a>, also known as <a href=\"https:\/\/www.gov.uk\/business-asset-disposal-relief\">Business Asset Disposal Relief<\/a>.<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"embed-container\"><iframe loading=\"lazy\" title=\"Tax in 10(ish) seconds - what is tax-efficiency?\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/93RKUoFKaXM?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">What is the Entrepreneurs\u2019 Relief?<\/h2>\n\n\n\n<p>The <a href=\"https:\/\/www.gov.uk\/entrepreneurs-relief\">Entrepreneurs\u2019 Relief<\/a> is one of the most attractive tax reliefs in the UK. It reduces the amount of Capital Gains Tax paid on disposals of qualifying:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>businesses<\/li><li>shares in a personal company<\/li><li>shares from an <a href=\"https:\/\/www.gov.uk\/tax-employee-share-schemes\/enterprise-management-incentives-emis\">Enterprise Management Incentive<\/a> (EMI)<\/li><\/ul>\n\n\n\n<p>You can claim up to:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>10% CGT on qualifying assets<\/li><li>\u00a31,000,000 lifetime gains<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Is my business eligible for the Entrepenuers\u2019 relief?<\/h2>\n\n\n\n<p>Not all businesses are eligible! In order for your business to qualify for the Entrepreneurs\u2019 Relief, it must be one of the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>A sole trader business<\/li><li>A <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/partnership\/\">partnership<\/a><\/li><li>A limited company<\/li><\/ul>\n\n\n\n<p>Bear in mind, companies in financial services or investments will not qualify. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Am I eligible?<\/h2>\n\n\n\n<p>Again, to be eligible, you\u2019ll have to meet one of the following:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>You\u2019ve owned the business for at least two years before the date you sell it<\/li><li>You\u2019ve been with the company for at least two years if you\u2019re selling shares<\/li><li>If your shares are not EMI shares, you had the option to buy them at least two years before you\u2019re selling them<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">How do I calculate the Entrepreneurs\u2019 Relief?<\/h2>\n\n\n\n<p>Here are the simple steps for calculating how much you could be entitled to:<\/p>\n\n\n\n<ol class=\"wp-block-list\"><li>Add together the capital gains (what you sold your shares for), deduct losses (if any), and work out the total taxable gain eligible<\/li><li>Next, subtract your <a href=\"https:\/\/taxfix.com\/en-uk\/capital-gains-tax-rates\/\">tax-free Capital Gains (CGT) Allowance<\/a><\/li><li>You pay 10% tax on what\u2019s left<\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\">Is the Entrepreneurs\u2019 Relief available for EMI shares?<\/h2>\n\n\n\n<p>Yes, it is! But only if these conditions are met:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>You\u2019ve been with the company for two years<\/li><li>Plus you have at least 5% of shares<\/li><li>And you also have 5% of the voting rights<\/li><\/ul>\n\n\n\n<p>If the shares are from an EMI, You must have bought the shares after 5 April 2013 and been given the option to buy them at least 2 years before selling them.<\/p>\n\n\n\n<p>If you\u2019re not sure what the Enterprise Management Scheme (EMI) is, you can <a href=\"https:\/\/www.gov.uk\/tax-employee-share-schemes\/enterprise-management-incentives-emis\">read more about it here<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What if I sold my business or shares before 11 March 2020?<\/h2>\n\n\n\n<p>In this case, you may be eligible to claim up to \u00a310,000,000 (the Entrepreneurs\u2019 Relief was reduced in the 2020 budget).<\/p>\n\n\n\n<p>You might also need to only have owned the shares or business for a year instead of two.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How do I claim the Entrepeneurs\u2019 Relief?<\/h2>\n\n\n\n<p>There are two ways in which you can claim this relief. You can either:<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>Fill in the <a href=\"https:\/\/www.gov.uk\/government\/publications\/entrepreneurs-relief-hs275-self-assessment-helpsheet\">Section A of the HS275 form<\/a><\/li><li>Claim when filing your Self Assessment tax return (the deadline for this is 31st January)<\/li><\/ul>\n\n\n\n<p>\ud83d\udd62 You have three years from the sale until you can claim. \ud83d\udd62<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you\u2019ve decided to move on from your business for whatever reason, you may be able to take advantage of something called the Entrepreneurs\u2019 Relief, also known as Business Asset Disposal Relief. What is the Entrepreneurs\u2019 Relief? The Entrepreneurs\u2019 Relief is one of the most attractive tax reliefs in the UK. It reduces the amount [&hellip;]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[432,427],"tags":[416,70,418],"class_list":["post-180","post","type-post","status-publish","format-standard","hentry","category-how-to-reduce-the-tax-you-pay","category-the-tax-basics","tag-benefits-reliefs-grants","tag-capital-gains-tax","tag-invest"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How does the Entrepreneurs&#039; Relief work? &#8211; Taxfix<\/title>\n<meta name=\"description\" content=\"Entrepreneurs Relief (also known as the Business Asset Disposal Relief) is a type of tax relief in the UK. 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