Entrepreneurs’ relief tips

Peter Rayney considers the pitfalls of using the beneficial 10% tax rate on owner manager exits

Entrepreneurs' relief (ER) is probably the most valuable tax break available to owner managers. It enables them to sell 'their' company at a modest 10% capital gains tax (CGT) rate on gains of up to £10m. With a main CGT rate of 28%, this means that ER produces a maximum tax saving of £1.8m, ie £10m × 18% (28% less 10%).

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