Don’t forget about Investors’ Relief

Investors should always remember Investors’ Relief.

It may have some restrictions, but it can be helpful when things like Entrepreneurs Relief doesn’t apply.



The Investors’ Relief is similar to Entrepreneurs’ Relief, however, there are some important differences, they are:

Unlike Entrepreneurs’ Relief, the investor can’t be an officer or employee of the company,

There is no minimum percentage of the company that the investor has to own.


If investors’ Relief does apply then the maximum capital gains tax rate on disposal is 10%.

The 10% tax rate is subject to a £10M lifetime limit.


The key conditions for Investors’ Relief to apply are as follows:
  • The shares must be in an unlisted company.
  • The investor must have received the shares on or after the 17th March 2016.
  • The investor must have had the shares for at least three years since the 6th April 2016.
  • The shareholder can’t be employed by the company during the time that they own the share, except from a few limited cases where the investor becomes an unpaid officer.
  • The shareholder can’t be the spouse of, or related to, the employees or officers of the company ownership.
  • The shareholder also can’t be the business partner of the employees of officers of the company ownership.
  • The shares must be subscribed for (as opposed to being acquired)
Subscribed shares are shares that can be exchanged for ordinary shares in a firm at a predetermined price.
When investing, there may be certain cases where investments can be structured to allow for both Entrepreneurs’ Relief and also Investors’ Relief, which could give a limit of £20 million for the 10% tax rate.