Chancellor George Osborne yesterday announced an increase in the lifetime limit on gains qualifying for entrepreneurs’ relief from £5 million to £10 million with effect from 6 April 2011.  Subject to satisfying certain conditions, gains on disposals of entrepreneurial businesses by individuals and certain trustees qualify for entrepreneurs’ relief.  This means that the first £10 million of qualifying gains will be taxed at a rate of 10%, with gains in excess of that figure being taxed at 18% or 28% depending on the individual’s total amount of taxable income.

To the extent that any gains realised by the taxpayer before 6 April 2011 exceeded the lifetime limit of entrepreneurs' relief in force at the date of disposal, CGT will remain payable at the full rate of 18%/28% on the excess, but only the £5 million of relief claimed will be set against the increased limit for future qualifying disposals.

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