This relief (TCGA92/S169H to S169S) 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 TCGA02/S169L, being excluded assets under subsection (4).
Detailed guidance is at CG63950+.
Gains that qualify for relief are reduced by 4/9ths so the
amount charged to capital gains tax is at an effective rate of 10
per cent.
The amount of gains that may qualify for the relief is
subject to a lifetime limit of £1,000,000.
As explained for retirement relief at
LLM8200, 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, but rather to a reduction in its scale.
