Entrepreneurs relief lifetime limit

Entrepreneurs’relief: lifetime limit

Individuals can claim relief for gains on multiple occasions up to the lifetime limit. Gains in excess of the limit will be charged at 18% or 28% (18% only if they arose prior to 23 June 2010).

Where an individual made gains in excess of £1m before 6 April 2010 (or £2m between 6 April 2010 and 22 June 2010), only the gains to which entrepreneurs' relief applied reduce the revised amount of headroom available for gains arising after that date.

For example, if qualifying gains of £1.7m had arisen before 6 April 2010 (on which entrepreneurs' relief of £1m applied), only £1m of the lifetime limit has been used, not £1.7m.

For an illustration of how to calculate the applicable lifetime limit in periods spanning the changes see Example 4.

Gains made before 6 April 2008 do not affect the lifetime limit.

It is the taxpayer's responsibility to keep track of the remaining lifetime limit, although as usual HMRC have the right to enquire into a Tax Return after it has been submitted.