Entrepreurs'relief: pre 23 June 2010 system

Prior to 23 June Entrpreneur's relief was calculated in a different way

Basic computation
The gain was calculated in the normal way. Before it was charged to tax, however, a reducing fraction of 4/9th was applied to the gain. The reduced gain was then charged to capital gains tax at the normal rate,which was then 18%

In straightforward cases this had the same effect as the current system and produced an effective capital gains tax rate of 10%. (4/9th of 18% is 8%. Applying that reduction to 18% gives a net figure of 10%.

Implications
This way of calculating the gain had some significant consequences in relation to gains which were held over or deferred, particular in cases involving exchanges of shares or securities. See Here  for detailed commentary on this issue.