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ARTICLE · 20 MARCH 2019

Private Equity Bulletin

Mayer Brown
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Having tightened the tests to be met for Entrepreneurs' Relief (ER), without consultation, the Government has now listened to the industry and produced a solution which should work in most cases.

European UnionCorporate/Commercial Law
Perry Yam
Perry Yam
James West
James West
Neil Evans
Neil Evans
Simon Rose
Simon Rose
Tim Baines
Tim Baines
Mark Prinsley
Mark Prinsley
Emily Chen
Emily Chen
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Entrepreneurs' Relief – Help with ABCs

Having tightened the tests to be met for Entrepreneurs' Relief (ER), without consultation, the Government has now listened to the industry and produced a solution which should work in most cases.

In order to counter tax planning which had the aim of obtaining undeserved ER, by creating "tailored" shares i.e. shares designed to obtain relief without any real commercial downside risk, the test for ER was widened in the October Budget. Shareholders had previously been required to meet the old test for a "personal company" of having at least 5% of ordinary shares by nominal value and 5% of the voting rights of the company deriving from these shares. The new tests added that with effect from 29 October 2018, the individual should also be beneficially entitled to:

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