Chancellor John Healey announced plans in his Budget today to consult on introducing a new form of CGT relief called announced Founders' Relief for entrepreneurs who “start and scale high growth, innovative UK companies.”
The aim is to reward company founders who launch high growth companies which produce jobs and aid economic growth.
Founders’ Relief will provide a reduced 10% rate of CGT on qualifying disposals, up to a lifetime cap of £10 million.
The Treasury says the limit will apply per individual, so more than one individual could claim the relief for the same company.
The relief will apply for qualifying disposals made on or after 6 April 2027 and consultation on the plans will run until 30 November.
The Treasury said: “The UK is one of the world’s leading places to start an innovative business, with world class universities, talent, research and capital. This is underpinned by a world leading tax offer.
“Founders' Relief will build on this offer by recognising founders and significant early investors who have built companies with a proven record of growth and innovation, when they dispose of their shares. It will aim to incentivise more high-growth and innovative companies to start, scale and stay in the UK and, when the time comes, reinvest into the next generation of founders.
“The prize will be more innovation commercialised here, more productive investment, good jobs across the country, and more successful companies choosing the UK as their long-term home.”
Founders’ Relief will be available to those who have started or invested early in UK companies that have demonstrated “sustained high growth.” The Treasury is consulting on terms and conditions for the relief.
Where the conditions are met, the relief will apply to gains on disposals of shares or securities in the company up to the lifetime limit of £10 million. This will be reduced by amounts claimed under the limits for Business Asset Disposal Relief and Investors’ Relief from 6 April 2027.