Significant cut to lifetime limit – but not quite abolition.
Effective immediately (from 11 March 2020) the lifetime limit on gains eligible for Entrepreneurs’ Relief (which offers a reduced 10% rate of CGT on qualifying disposals) will be reduced from £10m to £1 million.
The legislative detail will be introduced in Finance Bill 2020. It has been announced that Finance Bill will also provide that the lifetime limit must take into account the value of Entrepreneurs’ Relief claimed in respect of qualifying gains in the past. Therefore, any entrepreneurs who have already claimed this relief on past business disposals for gains in excess of £1m will no longer have access to this relief.
This is a significant reduction that was anticipated in some form, and comes in response to evidence that it has done little to incentivise entrepreneurial activity and that most of the benefit accrues to a small number of very affluent taxpayers.
The good news is that it has not been completely abolished and will still be available for small to medium sized business disposals, subject to the usual criteria for eligibility.
Article from ACCA In Practice