Investors’ Relief Print

Investors’ Relief was introduced in March 2016, and is available to individuals and trustees who subscribe for ordinary shares or an interest in ordinary shares in unlisted trading companies after 16 March 2016. This new relief extends the 10% rate of CGT into qualifying investments.

The relief is available in respect of ordinary shares in unlisted trading companies, and ordinary shares in unlisted holding companies of trading groups.

An upper limit of lifetime gains of £10m has been set for Investors’ Relief. This is in addition to the lifetime limit for claims made in respect of BADR, and oddly, was not reduced when the BADR limit was reduced from £10m to £1m.

To qualify, the investor must hold the shares throughout the period from the date the shares are issued and ending on the date of disposal. Where the shares were issued before 6 April 2016, the period must not end before 5 April 2019. For shares issued after 5 April 2016 the period must be at least 3 years.

Investors’ Relief is not available if the investor, or a connected person has been an officer or employee of the company, or of a connected company at any time during the period the shares are held.

This relief was claimable for the first time in respect of qualifying disposals of shares during 2019/20. As for BADR, a claim for Investors’ Relief must be made before the first anniversary of 31 January following the end of the tax year in which the disposal takes place. So, for a disposal during 2020/21 the claim must be made by 31 January 2023.

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