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HMRC internal manual

Lloyd's Manual

Capital gains: Names: entrepreneurs' relief

This relief (TCGA92/S169H to S169V) was introduced by FA08/SCH3 to complement the flat rate for capital gains tax that applies to disposals taking place on or after 6 April 2008. From that date, disposals no longer attract indexation or taper relief.

Entrepreneurs’ relief has the effect of charging certain gains at a lower rate of tax than the flat rate. The main conditions reflect similarities with those for retirement relief although with significant simplifications.

Gains arising on or associated with the disposal of the whole or part of a business may qualify, as may certain disposals of shares or securities, but not those held in Funds at Lloyd’s. These are not ‘relevant business assets’ under TCGA92/S169L, being excluded assets under subsection (4). Detailed guidance is at CG64005.

Until 22 June 2010, gains that qualify for relief were reduced by 4/9ths. For disposals on or after 23 June 2010, the gain is charged to capital gains tax at a rate of 10 per cent.

The amount of gains that may qualify for the relief is subject to a lifetime limit which is £10,000,000 for disposals made on or after 1 April 2011.

Reducing a member’s syndicate capacity, including where this is done by reducing the number of syndicate participations within a member’s spread, is not likely to amount to the disposal of part of the underwriting business. It is instead more likely to be a disposal of an asset.