Changes to CGT Investors’ Relief

tiemadmin • 28 November 2024

The rate of Capital Gains Tax (CGT) for Investors’ Relief will rise from 10% to 14% for disposals made on or after 6 April 2025. It will then increase further to 18% for disposals made on or after 6 April 2026. Additionally, the lifetime limit for Investors' Relief has been reduced from £10 million to £1 million for qualifying disposals occurring on or after 30 October 2024.

Investors’ Relief reduces the amount of CGT on a disposal of shares in a trading company that is not listed on a stock exchange.

To qualify for Investors’ Relief, you will need to subscribe for shares that meet the relevant qualifying conditions throughout the period you have owned them and that you have owned them for at least 3 years. The main conditions that must be met are:

  • they are ordinary shares in the company;
  • you subscribed for them in cash, and they were fully paid up when issued;
  • the company is a trading company or the holding company of a trading group;
  • none of the company’s shares are listed on a stock exchange; and
  • neither you nor any person connected with you is an employee of the company or of a company connected with it.

A claim should be made by the first anniversary of the 31 January following the end of the tax year in which the qualifying disposal takes place. For a qualifying share disposal in the current 2024-25 tax year (ending on 5 April 2025) a claim for Investors’ Relief must be made by 31 January 2027. A claim to Investors’ Relief may be amended or revoked within the time limit for making a claim.

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