Entrepreneurs' relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where this relief is available Capital Gains Tax (CGT) of 10% is payable in place of the standard rate. CGT on the disposal of chargeable assets is usually chargeable at 20%. There are a number of qualifying conditions that must be met in order to qualify for Entrepreneurs' Relief.

When the relief was first introduced there was a lifetime limit of £1 million for gains. This was increased to £2 million from 6 April 2010, to £5 million from 23 June 2010 and to a generous £10 million from 6 April 2011. This is a lifetime limit that means individuals can qualify for the relief more than once, subject to an overriding total limit of £10m of qualifying capital gains. There are time limits that must also be met to make a claim.

The relief is available to individuals as well as some trustees of settlements. To qualify the individual should be either an officer, or employee of the company and own at least 5% of the company and have at least 5% of the voting rights. There are also other qualifying conditions that must be met in order to qualify for the relief.

Entrepreneurs' Relief is an important and valuable tax relief for qualifying business owners. There is also a sister relief called Investor’s Relief which has a separate £10 million lifetime cap. This is useful for investors who do not meet the officer or employee requirement for Entrepreneurs' Relief. There is a separate lifetime cap of £10 million for qualifying gains by investors.