Entrepreneurs' Relief
The pre-2020 name for what is now called Business Asset Disposal Relief (BADR). Renamed in the March 2020 Budget when the lifetime limit was reduced from £10 million to £1 million. The qualifying conditions remained broadly unchanged — a 5% shareholding and two-year holding period for personal company disposals — but the headline rate has since risen from 10% (2024/25) to 14% (2025/26) and 18% from April 2026.
How it works
Entrepreneurs' Relief was introduced to encourage business owners to build and eventually sell their companies by offering a reduced Capital Gains Tax rate on qualifying disposals, rather than the standard rates that would otherwise apply. It was one of the most generous reliefs in the UK tax system for over a decade, letting qualifying business owners shelter substantial gains at a flat 10% rate up to the original £10 million lifetime limit.
The March 2020 Budget cut the lifetime limit to £1 million and renamed the relief Business Asset Disposal Relief, but it did not change the underlying qualifying conditions — you still needed at least a 5% shareholding and a minimum two-year holding period for a personal company disposal. If you see 'Entrepreneurs' Relief' referenced in older financial planning documents, valuations, or accountant correspondence, it's describing exactly the same relief now known as BADR, just under the pre-2020 rules and limit.
Anyone researching a disposal that completed before the March 2020 rename should use the old £10 million lifetime limit that applied at the time, not the current BADR figures — the relief you're entitled to is fixed by the rules in force on the date of disposal, not the date you happen to be reading about it.
Example: Same gain, two different eras
Suppose you sold a qualifying business for a £2 million gain. Under Entrepreneurs' Relief rules before March 2020, the entire £2 million would have qualified for the 10% rate, since it sits within the old £10 million lifetime limit, giving a tax bill of £2,000,000 × 10% = £200,000.
Under today's BADR rules, only the first £1 million of the lifetime limit qualifies for the reduced rate — currently 18% from April 2026 — so £1,000,000 × 18% = £180,000 is due on that portion, and the remaining £1 million is taxed at the standard Capital Gains Tax rate that applies outside the relief.
Frequently asked questions
Is Entrepreneurs' Relief still available today?
No, not under that name — it was renamed Business Asset Disposal Relief in the March 2020 Budget, though the relief itself continues to operate under broadly the same qualifying conditions with a much lower lifetime limit.
Why was Entrepreneurs' Relief renamed rather than replaced?
The government wanted to cut the lifetime limit from £10 million to £1 million to reduce its cost to the Exchequer, and used the rename to signal the change while keeping the qualifying tests largely intact.
Does my old Entrepreneurs' Relief claim still count towards today's BADR limit?
Yes — gains that used Entrepreneurs' Relief before the 2020 rename count towards your lifetime BADR limit, since it's the same relief carried forward under a new name, not a separate allowance.
Related Terms
Business Asset Disposal Relief (BADR)
A Capital Gains Tax relief on qualifying business disposals — charged at a flat rate of 10% for 2024/25, 14% for 2025/26, and 18% from April 2026 — up to a £1 million lifetime limit per individual.
Capital Gains Tax
A tax on the profit (gain) you make when you sell or dispose of an asset that has increased in value, such as shares, investment property, or business assets.
Annual Exempt Amount
The amount of capital gains you can make in a tax year before Capital Gains Tax becomes due, currently £3,000 for individuals.
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