Budget 2010 – Entrepreneurs’ Relief
In a surprise move, the Chancellor announced a doubling in the lifetime limit on entrepreneurs’ relief from £1million to £2million. The change will be effective for gains realised after 6 April 2010.
The lifetime limit applies to individuals as well as to trustees of settlements. Where individuals or trustees make qualifying gains above the previous £1 million limit before 6 April 2010, no additional relief will be allowed for the excess above the old limit.
Entrepreneurs’ relief will be available on any additional gains after 5 April 2010 e.g someone who had previously utilised gains up to £1 million will be given relief up to the new limit of £2 million for qualifying gains after 5 April 2010.
This relief results in an effective capital gains tax rate of 10% on qualifying capital gains.