Glossary · UK
What is Investors' Relief?
A reduced 14% Capital Gains Tax rate for outside investors in unlisted trading companies, with a £1m lifetime cap.
Full Definition
Investors' Relief reduces the Capital Gains Tax rate on qualifying disposals of shares in unlisted trading companies, aimed at external investors who are not employees or directors. It complements Business Asset Disposal Relief but targets passive long-term backers rather than owner-managers. The relief now carries a £1 million lifetime cap on gains (sharply reduced from the original £10 million). The CGT rate on qualifying gains rose to 14% for disposals on or after 6 April 2025 and is set to align further with Business Asset Disposal Relief at 18% from April 2026. To qualify, shares must generally be newly issued, fully paid ordinary shares subscribed for in cash, held continuously for at least three years from 6 April 2016, in an unlisted trading company, with the investor not being a relevant employee. It sits outside the £3,000 annual CGT exempt amount that applies to ordinary gains.