1. Eligibility

You may be able to pay less Capital Gains Tax when you sell (or ‘dispose of’) all or part of your business.

Entrepreneurs’ Relief means you’ll pay tax at 10% on qualifying assets (instead of the normal rate of 18% or 28%).

Work out if you qualify

You’ll qualify if you dispose of any of the following:

  • all or part of your business as a sole trader or business partner - including the business’s assets after it closed
  • shares in a company where you have at least 5% of shares and voting rights (known as a ‘personal company’)
  • assets you lent to your business or personal company

If you’re selling all or part of your business

All the following must apply:

  • you’re a sole trader or business partner
  • you’ve owned the business for at least one year before the date you sell or close it
  • you sell or dispose of your business assets within 3 years after selling or closing the business

If you’re selling shares

All the following must apply for at least one year before you sell your shares:

  • you have at least 5% of shares and voting rights in the company
  • you’re an employee or director of the company (or one in the same group)
  • the company’s main activities are in trading (rather than non-trading activities like investment)

If you’re selling assets you lent to the business

All the following must apply:

  • you’ve sold your part of a business partnership or your shares in a personal company
  • you owned the assets but let your business partnership or personal company use them for at least one year up to the date you sold your business or shares