Entrepreneurs’ relief changes

The Chancellor has announced two changes to Capital Gains Tax entrepreneurs’ relief:-

1. The minimum qualifying holding period for entrepreneurs’ relief will be increased from 12 months to 24 months for disposals made on or after 6 April 2019.
2. The shareholding test is being tightened up on with effect from Budget Day – 29 October 2018.  In addition to the individual being required to hold 5% or more of the ordinary share capital and voting rights, they must now also be entitled to 5% or more of the company’s distributable profits and assets in a winding up, as at present the individual must also be an officer or employee of the company concerned and the company must be a trading company or the holding company of a trading group.