Capital gains tax if you own a business

Capital gains tax

Capital gains tax if you own a business

By Ian Robinson

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Capital gains tax if you own a business

If you are selling a business you own, you may qualify for a special capital gains tax relief called entrepreneurs’ relief. 

You can claim entrepreneurs' relief  if:

  • you are a sole trader or partner selling part or all of your business or its assets, or
  • you control at least 5% of a company the shares or assets of which you are selling
  • you sell assets from the above businesses within three years of closing down.

The relief effectively reduces the capital gains tax rate to 10% on the first £10m of gains you make over your lifetime from selling such assets. Any gains above this are taxed at 20%. The relief applies if you run a trading business or furnished holiday letting, but not any other property-letting business.

  • Last updated: April 2016
  • Updated by: Ian Robinson