Entrepreneurs Relief (“ER”) was originally introduced in April 2008 as successor to the popular Business Asset Taper Relief (“BATR”). ER was designed to provide some relief for individuals disposing of qualifying business assets but was clearly not as generous as BATR.

For those who do not remember, there was a political will to change from BATR as it provided a 10% tax rate on all gains (no matter what size) and it was thought that private equity firms were benefiting too heavily from the relief. Therefore, ER was introduced. It initially offered relevant individuals relief from capital gains tax at the full rate (18% at that point) to a reduced effective rate of 10% on lifetime gains of up to £1 million. This was a significant curtailment in capital gains tax relief, when compared to BATR, for those with relevant gains in excess of £1 million.


This message clearly filtered through to the chancellor and subsequently the lifetime limit was increased as follows:

Disposals between 6 April 2008 and 5 April 2010 – £1 million

Disposals between 6 April 2010 and 22 June 2010 – £2 million

Disposals between 23 June 2010 and 5 April 2011 – £5 million

Disposals from 6 April 2011 – £10 million


These days ER provides vital tax relief to entrepreneurs taking the risk and starting or investing in their own businesses.


However, from a government’s perspective, it was initially budgeted to cost a few hundred million pounds and is now costing over £3 billion. This could mean it is in the crosshairs of the chancellor, Philip Hammond, when he stands on 22nd November.

Contact us

If you have any questions about the points in the article above or you’re worried about how the budget may affect your business, please get in touch below.