Budget changes: entrepreneurs' relief and EMI options

The Finance Bill 2013 makes changes to the rules applying entrepreneurs’ relief (ER) to the disposal by an employee or officer of a company, on or after 6 April 2013, of shares meeting the requirements of the enterprise management incentive (EMI) scheme.

ER enables shareholders of companies to sell their shares at a capital gains tax rate of only 10% for lifetime gains of up to £10m. This is in contrast to the normal rate of 28% applying to capital gains. The Finance Bill relaxes the rules relating to ER for shares acquired through EMI options, by disapplying the normal requirement for the seller to hold 5% or more of the shares of the company at the time of disposal…

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