Investors' Relief reduces the rate of Capital Gains Tax (CGT) paid on the disposal of unlisted company shares by persons who invest in shares by subscription.

Subscribers, see Investors' Relief: subscriber guide for your detailed version of this guide.

This is a freeview 'At a glance' guide to Capital Gains Tax Investors' Relief.

At a glance

Investors’ Relief (IR)

Investors' Relief is a Capital Gains Tax (CGT) relief, available to individual investors.

It applies to gains made on the disposal of investments in ordinary shares and works by reducing the rate of CGT charged on qualifying gains to 10% for higher and additional rate taxpayers.

  • The original share investment must have been made on or after 17 March 2016 and held for three years from 6 April 2016.
  • The shares must have been subscribed for in cash.
  • The disposal must be made on or after 6 April 2019.
  • The unlisted investee company must be trading or the holding company of a trading group.

Although IR has some similarities to Business Asset Disposal Relief (BADR) (Entrepreneurs' Relief), IR is a different relief:

  • It is designed for investors who are not actively involved in the business, e.g. investors on the AIM market and business angels.

Like BADR:

  • Investors' Relief is subject to a lifetime cap. For IR this is £10 million.
    • The £10 million cap for Investors' Relief is in addition to the £1 million (£10 million to 11 March 2020) lifetime cap for BADR.
  • Investments must be in unlisted shares.
  • The company must be a trading company throughout.

 Unlike BADR:

  • There is no minimum % shareholding requirement.
  • Investors or persons connected to them must not be officers or employees of the company on subscription.
    • Business angel investors may later become unpaid directors or qualifying 'relevant employees' 
  • Investors must not receive value in respect of their shareholdings. Dividends are allowed.
  • Investments must be made on or after 17 March 2016, and held for at least three years starting from 6 April 2016.
  • If a shareholder disposes of a shareholding consisting of qualifying and non-qualifying shares, only a proportion of the gain will qualify for Investors' Relief.

Detailed CGT relief guides for subscribers

Business Asset Disposal Relief Index


Business Asset Disposal Relief (Entrepreneurs' Relief): overview

How the relief works
Tracker: What's new?
Planning points
Different forms of BADR: Applies to:

Disposal of a business or part of a business

Sole traders or partners: s.169I(2)(a) TCGA 1992

Disposal of the assets of a business following its cessation

Sole traders or partnerships: s.169I(2)(b)
Disposal of shares or securities in a company Officer or employee shareholders
Disposal of a joint venture interest Joint venture officer or employee shareholders
Disposal of trust business assets Trustees
Disposal associated with a material disposal Shareholders or partners
Alternative reliefs  

Disposal of shares or securities in a company (Investors' Relief)

Investor shareholders (not officers or employers, on subscription)


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