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Investors’ relief is a capital gains tax (CGT) relief on the disposal of qualifying shares in an unlisted company. A taxpayer making a disposal that qualifies for investors’ relief will pay tax at a rate of 10%.

Investors’ relief is aimed at incentivising external investment. It is not intended to be accessible by individuals whose natural means of capital gains relief on a disposal would be business asset disposal relief (BADR). Accordingly, most employees and directors will not be entitled to investors’ relief.

Also, unlike BADR, there is no requirement to hold a minimum number of shares in the company. There is a lifetime limit on the relief of £1m (£10m for disposals prior to 30 October 2024), which is in addition to that applying for BADR.

The rules for investors’ relief are contained in TCGA 1992, ss 169VA–169VY. HMRC guidance on investors’ relief can be found at CG63500P.

At the Autumn Budget 2024 it was announced that the rate of investors’ relief will increase to 14% for disposals made on or after 6 April 2025, and from