Changes to Entrepreneurs’ Relief were announced in the Chancellors budget a couple of weeks ago.

For business owners and individuals owning 5% or more of their employing company’s ordinary shares, the lifetime limit on capital gains qualifying for entrepreneurs’ relief will be increased from £5m to £10m for qualifying disposals on or after 6 April 2011. Any individuals or trustees who have previously fully utilised their relevant lifetime limits will be able to make further qualifying gains from 2011/12 onwards. Entrepreneurs’ relief reduces the tax rate on any qualifying disposals to 10%.

To get the most tax efficient outcome of a sale of a business or shares in it, some tax planning will be necessary.