On 28 October 2026, the CIOT responded to the government’s proposal for a new ‘Founders’ Relief’ – a capital gains tax (CGT) relief aimed at rewarding individuals who establish and grow successful businesses. While supporting the policy objective, the CIOT warned that the relief must avoid the ‘beartraps’ – complex anti-avoidance conditions and cliff-edge disqualifiers – that have plagued existing reliefs such as Business Asset Disposal Relief (BADR) and Investors’ Relief. The proposal was unveiled in the Autumn Budget 2026.
Key Takeaways
- Targeted at Genuine Founders: The relief would apply to founding shareholders who have held shares for a minimum period and meet active participation tests.
- Anti-Avoidance Complexity Feared: CIOT urges legislators to avoid replicating the intricate conditions of BADR (e.g., personal company test, 2-year holding period) that often trip up taxpayers.
- Interaction with Existing Reliefs: The interplay with BADR, Investors’ Relief, and the new ‘Carried Interest’ regime requires careful drafting to prevent double counting or unintended exclusion.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement