The FT reports that the Chancellor of the Exchequer is apparently reviewing Entrepreneurs Relief and it seems likely that changes to the regime will be announced in the upcoming budget.
The regime, which allows eligible shareholders to benefit from a capital gains tax rate of 10% (rather than the usual 20%) up to a maximum of £10m, has been criticised as benefiting the wealthy.
Any reform of Entrepreneurs Relief should bear in mind the aims of the regime when it was put in place - to encourage individuals to establish new ventures. The government should be wary of any changes that harm the UK's reputation as a business friendly environment where it is easy to establish new ventures and attract investment to support such ventures. If Entrepreneurs Relief is to be abolished or changed hopefully the budget will include replacement proposals to meet these goals. With a bit of luck the Chancellor has something up his sleeve...
Entrepreneurs relief was introduced by Gordon Brown’s Labour government in 2008 and was designed to encourage people to start new companies.