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 gains 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 or securities in a company where you have at least 5% of shares and voting rights (known as a ‘personal company’)
  • shares you got through an Enterprise Management Incentive (EMI) scheme after 5 April 2013
  • assets you lent to your business or personal company

You may also qualify if you’re a trustee selling assets held in the trust.

If you’re selling all or part of your business

Both 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 it

The same conditions apply if you’re closing your business instead. You must also dispose of your business assets within 3 years to qualify for relief.

If you’re selling shares or securities

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

  • you’re an employee or office holder of the company (or one in the same group)
  • the company’s main activities are in trading (rather than non-trading activities like investment) - or it’s the holding company of a trading group

Either of the following must also apply for at least one year before you sell your shares:

  • you have at least 5% of shares and voting rights in the company - if they’re not EMI shares
  • you were given the option to buy them at least one year before you’re selling them - if they’re EMI shares

If the company stops being a trading company, you can still qualify for relief if you sell your shares within 3 years.

If you’re selling assets you lent to the business

Both the following must apply:

  • you’ve sold at least 5% of 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 - or the date the business closed