Investors’ Relief

21 Feb

Investors’ Relief

Investors’ relief is a type of tax relief available for individuals with chargeable gains from disposals of qualifying shares. We will briefly touch on the conditions for eligibility and the mechanics of investors’ relief below.

Conditions for qualifying shares:

  • New ordinary shares in an unlisted company
  • Issued after 17 March 2016 and held for 3 years. Therefore, only applies to disposals made after 6 April 2019

How it works:

Relief is obtained by taxing qualifying gains at 10%, regardless of the level of the individual’s income.

The Small Print:

There is no minimum shareholding requirement. Investors (or persons connected to them) must not be officers (directors) or employees of the company on subscription.

There will be a £10m lifetime limit of gains which can be claimed under investor’s relief. It is worth nothing however, that the £10m limit of investor’s relief is separate to the £1m limit on entrepreneurs’ relief.

More information on entrepreneurs’ relief can be found here.

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