In the 2011 Budget, the Chancellor announced that, with effect from 6 April 2011, the lifetime limit for entrepreneurs' relief will increase from £5 million to £10 million.

The relief is available to individuals and trustees who dispose of qualifying business assets and shares and meet certain other conditions (see PLC Tax, Practice note, Entrepreneurs' relief: overview). For disposals on or after 6 April 2011, the first £10 million of qualifying capital gains will be taxed at a rate of 10%, with gains in excess of that figure being taxed at the individual's marginal rate. To the extent that any gains realised by the taxpayer before that date exceeded the lifetime limit of entrepreneurs' relief in force at the date of disposal, capital gains tax will remain payable at the full rate of 18% or 28% on the excess (see Practice note, Tax year 2010-2011: selected tax, NICs and share schemes data: CGT), but only the £5 million of relief claimed will be set against the increased limit for future qualifying disposals.

No other changes to entrepreneurs' relief were announced in the 2011 Budget. This is despite the fact that many commentators and the Office of Tax Simplification (OTS) have called for the amendment or removal of the rule that the individual must hold 5% of the ordinary share capital and voting rights for one year prior to the disposal to qualify. This rule severely limits the availability of entrepreneurs' relief in an employee share plans context, as few employees hold 5% of the shares in their employer for at least one year before disposal. It remains possible that the government will consider further changes to entrepreneurs' relief in its response to the OTS proposals.

Source: 2011 Budget - HMRC Overview of Tax Legislation and Rates, para 1.7: Entrepreneurs' relief, page 2 and Tax Information and Impact Note.