Entrepreneurs’ Relief lifetime limit doubled

The lifetime limit on Entrepreneurs’ relief has been doubled with effect from 6 April 2011. The limit for disposals from 23 June 2010 to 5 April; 2011 is £5 million, and the limit from 6 April 2011 onwards is £10 million. Those taxpayers who have made previous disposals up to or in excess of the limit can make further disposals after 6 April attracting the ER rate of 10% CGT, but previous disposals in excess of the old limit will not be revisited.

The previous limit of £5m would have covered most SME circumstances and therefore the benefit is likely to be limited to a small number of individuals, including serial entrepreneurs. No more than 30,000 claim any part of their relief in any one year. Perhaps more of a PR story for the government but welcome never the less.