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Investors’ relief is a capital gains tax (CGT) relief on the disposal of qualifying shares in an unlisted company.

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 rate of investors’ relief is 14% for disposals made on or after 6 April 2025 (10% prior to this date), and will increase to 18% for disposals made on or after 6 April 2026. The main rates of CGT for disposals on or after 30 October 2024 are 18% (basic rate) and 24% (higher rate). Therefore from April 2026 the investors’ relief rate will match the basic rate