Effective from 6 April 2020
A claim is required by the anniversary of the 31 January following the tax year when the
disposal took place. For a qualifying business disposal in the tax year 2019-20 a claim must be
made by 31 January 2022.
Entrepreneurs' Relief is subject to a lifetime limit of £10million qualifying gains per individual for
disposals made before 11 March 2020. For disposals made on or after 11 March 2020, the
cumulative lifetime limit has been reduced to £1million. All previous gains on which
Entrepreneurs' Relief has been claimed must be taken into account when determining the level
of lifetime limit remaining for each year.
Mitigation
Check that the asset disposed of is a qualifying business asset. Qualifying business assets are:
• assets that were used in the whole or part of a business carried on by the individual or by a
partnership the individual was a member of and includes goodwill (except where sold to a
close company which is a related party – see CG64006) and business premises but not
shares and securities which are held as an investment (see bullet three) when the whole or
part of that business was disposed of. Relief is not available on the disposal of assets in a
continuing business unless they comprised part of a disposal of a distinct part of a business -
see CG64015+
• assets that were in use in a business carried on by the individual or a partnership the
individual was a member of, and were disposed of within the period of three years after the
time the business ceased
• certain shares in and securities of a trading company or holding company of a trading group
• assets owned by an individual but used for the purposes of a business carried on by either a
partnership in which the individual is a partner or a company in which the individual held a
certain amount of shares where there is also a disposal of whole or part of the business,
shares or securities (an associated disposal).
For further guidance see CG63975.
The qualifying conditions and date the qualifying period ends depend on the type of disposal.
Check that all the qualifying conditions have been met throughout a two-year qualifying period:
• For disposals of whole or part of a business the business must have been owned directly by
the individual or by a partnership of which they were a member. The qualifying period ends on
the date of disposal
• For disposals of assets following a cessation of a business, the business must have been
owned directly by the individual or by a partnership of which they were a member. The
qualifying period ends on the date the business ceased and the disposal of the asset must be
within three years of the date the business ceased
• For further information on disposals of shares in and securities of your 'personal' company
see Helpsheet 275 or guidance at CG63950+
• For associated disposals the individual must make a disposal of the asset and a disposal of
the individual's interest in the partnership or company. The individual must have disposed of
at least a 5 per cent interest in either the assets of a partnership, the company's ordinary
share capital (which carry at least 5 per cent of the voting rights - see CG64050), or of the
securities of a personal company. The company must have been a trading company or the
holding company of a trading group throughout the period of 2 years ending with the date of
disposal - see CG64055 and the individual must also be an officer or employee of that
company (or of one or more members of a trading group) - see CG64110. The asset
associated with the relevant material disposal must have been in use for the purposes of the
business throughout the period of 2 years ending with the earlier of the date of the material
disposal or the date of cessation of the business. The asset must also has been owned by the
individual throughout a period of 3 years ending with the date of disposal if it was acquired on