This used to be called Entrepreneurs’ Relief, and it used to be worth more. The rate was 10% for years, rose to 14% in April 2025, and has been 18% since 6 April 2026. It is still the first thing to check when you sell.

Who qualifies

Selling shares in a company, all of the following for at least 2 years up to the date of sale:

• the company is trading, or is the holding company of a trading group. Mainly-investment companies do not count
• it is your “personal company”: you hold at least 5% of the ordinary shares and 5% of the voting rights
• you are an employee or office holder, which covers directors

You must also be entitled to at least 5% of either the distributable profits or the assets on a winding up.

Selling all or part of a sole trader business or partnership share: you need to have owned the business for at least 2 years up to the sale.

After closing down: if the company stops trading, you can still qualify if you sell the shares within 3 years.

The limits

£1 million of qualifying gains over your lifetime, claimed in as many bites as you like. Above the cap, gains fall back to the normal rates, 18% or 24% depending on your income. And remember the allowance: the first £3,000 of any year’s gains is tax free anyway.

The dilution trap

Take on investors and your holding can slip below 5% through no sale of your own. GOV.UK lets you elect to be treated as if you sold and re-bought your shares immediately before the dilution, crystallising a gain on which you can claim the relief while you still qualify. If your company is raising money, this is the page to read before you sign.

How to claim

Through your Self Assessment tax return, or with Section A of the Business Asset Disposal Relief helpsheet. It is a claim, not an automatic calculation: nobody gives it to you unless you ask.

Sources

All pages checked 20 October 2026.

• Business Asset Disposal Relief: eligibility: https://www.gov.uk/business-asset-disposal-relief
• Business Asset Disposal Relief: how to claim: https://www.gov.uk/business-asset-disposal-relief/how-to-claim
• Capital Gains Tax rates: https://www.gov.uk/capital-gains-tax/rates

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