CG63500 | Investors’ Relief: Introduction and layout of guidance

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The content in this manual covers a much higher level of detail compared to say a Helpsheet supporting the Self Assessment Tax Return. If you are looking for an introduction to the main rules for the relief for a particular year, please see the Investors' Relief (Self assessment helpsheet HS308) on GOV.UK and select the year you are considering.

Share disposals which qualify for Investors’ Relief occurring before 6 April 2025 are charged at a rate of 10%. For disposals occurring on or after 6 April 2025 gains which qualify for Investors’ Relief are charged at a rate of 14%. This increases to 18% for qualifying gains arising from disposals occurring on or after 6 April 2026 (see CG63515).

The amount of Investors’ Relief is subject to a ‘lifetime cap’ of gains in respect of which the relief can be given. The amount of this lifetime cap is –

• for disposals occurring on or after 30 October 2024: £1 million, or

• for disposals occurring before 30 October 2024: £10 million

of gains that can qualify for Investors’ Relief.

For instance, if a person has made a qualifying disposal of £3 million in 2022 and Investors’ Relief applied to reduce all of those gains, and that person makes a further qualifying disposal on or after 30 October 2024, no further relief would be available as they would have already exceeded the £1 million lifetime cap applicable to disposals on or after that date.

See CG63560 for further guidance on the reduction of the lifetime cap applying to disposals on and after 30 October 2024.

Trustees can claim against the lifetime cap of an individual who is a beneficiary of the trust in certain circumstances.

Shares must be “ordinary” shares in a trading company which are not listed on a stock exchange. The shares must have been issued on or after 17th March 2016, the date the relief was announced, and must have been held for three years before being disposed of, although shares acquired in certain reorganisations may be treated as having been acquired before the reorganisation.

The relief is intended to encourage and reward new investment so there are conditions to ensure that the shares are subscribed for with new money that benefits the company. The relief is also targeted at external investors so is not usually available where the investor or an individual connected with them is employed by the company.

Investors’ Relief does not affect the way the gain on a disposal of shares is calculated, but where not all the shares held would qualify for the relief there are rules that identify how much of the gain will qualify for the relief. Although the relief will not be available for disposals before March 2019, there are also rules that take account of part disposals of shareholdings before that date that are designed to maximise the potential relief available to retained shares. The rules therefore distinguish between shares that are -

• Qualifying,

• Potentially Qualifying (would qualify but not held yet for 3 years), and

• Excluded (cannot qualify, including shares acquired before 17 March 2016)

These rules are quite complex but will not have to be considered in straightforward situations such as where shares in a company are first acquired on or after 17 March 2016 and are disposed of on or after 6 April 2019.

This is only a brief summary of how Investors’ Relief works, detailed guidance on the legislation at sections 169VA to 169VY TCGA 1992 is available in the following pages.

Layout of the guidance