Healey’s new ‘Founders’ Relief’ will only help 600 people a year. Guess who’s paying for it? Other asset holders…
The Chancellor has produced a 10% capital gains rate on up to £10 million of lifetime gains for founders of “high-growth, innovative” companies. HMRC’s impact document notes that roughly 600 people a year will be eligible to claim relief. To qualify, you need to have held at least a quarter of the company from the start and owned it for five years, built it to £10 million of turnover and 15 staff, and shown rapid growth or serious R&D spending. The local builder selling up after 30 years need not apply…
Business Asset Disposal Relief, the relief ordinary business owners actually use when they sell, has its lifetime limit halved from £1 million to £500,000 from April 2027. The Red Book admits a quarter of claimants will lose CGT relief. Between 39,000 and 48,000 people claimed BADR in each recent year, so that is around 10,000 business owners worse off annually. This comes after the BADR rate already rose from 10% to 14% in April 2025 and to 18% in April 2026…
The two measures are set to broadly cancel each other out in terms of anticipated Exchequer receipts. Sunak cut the old Entrepreneurs’ Relief limit (affecting 5,000) from £10 million to £1 million in 2020. Healey has brought back the same £10 million limit for a much smaller group of people. Funnily enough, the Treasury press release found room to plug Founders’ Relief but not a word on the BADR cut…
Robert Jenrick told a rally on Monday:
“They say Chancellors are either undertakers or bookies. This one is an ostrich – and when the Chancellor buries his head in the sand, the rest of us, we’re left staring at his you know what.”