Consultation outcome

Allowing Entrepreneurs’ Relief on gains made before dilution

This consultation has concluded

Download the full outcome

Detail of outcome

At Spring Statement the government published a consultation on the details of a change announced at Autumn Budget 2017 to the qualifying conditions of Entrepreneurs’ Relief. The government has decided not to make any major changes to the details of this change, but has taken steps to ensure that minority shareholders are not disadvantaged in comparison to non-minority shareholders, by allowing individuals to establish the valuation of their shares on the assumption of a whole company sale.

The government has also published the draft legislation for this change

Original consultation


Seeking views on changes to Entrepreneurs’ Relief to ensure that it does not discourage entrepreneurs from seeking external finance for their companies.

This consultation ran from

Consultation description

At present, entitlement to the special 10% rate of capital gains tax may be lost when an entrepreneur’s company issues new shares and as a result causes their personal stake to fall below 5%. The proposal announced at Autumn Budget 2017, as detailed in this consultation, allows an individual in this position to elect to be treated as if they had disposed of their shares and reacquired them at their market value just before the time the company issued new shares. The individual may claim Entrepreneurs’ Relief on that gain either at the time of election, or on a future disposal of shares.


Published 13 March 2018
Last updated 6 July 2018 + show all updates
  1. Updated with the final outcome: 'Allowing Entrepreneurs’ Relief on gains made before dilution: consultation response'.
  2. First published.