Refuelling of Entrepreneurs’ Relief

George Osborne’s March 2011 Budget doubled the lifetime limit for Entrepreneurs’ Relief to £10million for gains made on or after 6th April 2011. This means that if you have assets which qualify for Entrepreneurs’ Relief, your rate of tax on gains made on those assets is only 10%.

The lifetime limit has increased tenfold in the year since March 2010. This has moved the relief from an issue that was peripheral, to one which is key for business clients when they are considering their business sale strategy.

The rules are complex but the main requirements to qualify for Entrepreneurs’ Relief are:

1. There must have been a disposal of a trading asset or shares in a trading company.
2. An individual must have held an interest in that asset for at least one year.

There are important planning points. Both husband and wife can benefit from Entrepreneurs’ Relief. Thus a judicious share transfer together with the appointment of the spouse as an employee or director could result in a tax saving of £1.8m.

To review your personal position or for more information contact Graham Wood 

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