Finance Bill Tracking Service 2010 | Budget 2010


Who is likely to be affected?

1. Individuals and trustees of settlements.

General description of the measure

2. Legislation will be introduced in Finance Bill 2010 to increase the lifetime limit on gains qualifying for entrepreneurs' relief from £1 million to £2 million.

Operative date

3. The change has effect for disposals on or after 6 April 2010.

Current law and proposed revisions

4. The amount of an individual's gains that can qualify for entrepreneurs' relief is subject to a lifetime limit of £1 million. For trustees, the £1 million limit is that of the beneficiary of the settlement who meets the conditions for the trustees to claim the relief.

5. Finance Bill 2010 will include provision to increase that limit to £2 million from 6 April 2010.

6. Where individuals or trustees make qualifying gains above the previous £1 million limit before 6 April 2010, no additional relief will be allowed for the excess above the old limit. But if they make further qualifying gains after 5 April 2010, they will be able to claim relief on up to a further £1 million of those additional gains, giving relief on accumulated qualifying gains up to the new limit of £2 million.

7. The other rules for entrepreneurs' relief are unchanged. Gains qualifying for the relief will continue to be reduced by the fraction 4/9, leaving the effective rate of capital gains tax on these gains at 10 per cent.

Further advice

8. If you have any questions about this change, please contact the capital gains tax team by email at or by telephone on 020 7147 0127. Information about Budget measures is available on the HM Revenue & Customs website at