Entrepreneur's relief has had some significant changes since it was first introduced, the latest being in this year's Budget, soon to be enacted in the Finance Act. It is also being re-named Business Asset Disposal Relief (BADR). The rules on what and who qualifies remain the same apart from some provisions to prevent forestalling the reduction in limit.
The main change is to reduce the lifetime limit for qualifying gains to £1m from £10m. This may not affect a lot of people who have been running a small business which they are selling on retirement. It is most likely to impact on owners of larger businesses, farmers with valuable land or serial entrepreneurs who sell one business and start another. HMRC estimate that 80% of those using the relief will be unaffected.
The Government's stated purpose of this, according to its Budget documents, was to improve the effectiveness and value for money of the relief. The Government also claimed it would encourage genuine risk takers and entrepreneurs in a fair way.
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