In the United Kingdom, they have a tax relief called Entrepreneurs’ Relief.
However, according to a recent business barometer survey conducted by RSM Tenon, 13% of UK entrepreneurs were aware what Entrepreneurs’ Relief was.
Entrepreneurs’ Relief is a tax relief, which potentially reduces the capital gains tax rate on disposal of company shares by shareholders to 10 per cent.
It was introduced by the government to kick-start mergers and acquisitions with a starting price of £2million, which was later raised to £5million.
Today, if you are an entrepreneur in the United Kingdom you are entitled to a maximum lifetime entitlement to Entrepreneurs’ Relief of £10million.
As long as you have:
- A company must be a trading company (or the holding company of a trading group);
- A shareholder must have at least a five per cent holding of ordinary shares and voting rights;
- A shareholder must be an officer or employee of the company; and
- The above conditions must be satisfied for 12 months prior to disposal of the shares.
