Would I qualify for the new Founders’ Relief if I sell my business?

A new tax relief announced in the Autumn Budget 2026 could offer significant Capital Gains Tax (CGT) savings for entrepreneurs selling their businesses.

Founders’ Relief is expected to allow qualifying business owners to pay CGT at just 10% on qualifying gains of up to £10 million over their lifetime, for qualifying share sales from 6 April 2027.

However, the qualifying conditions are demanding, and the relief is likely to be relevant to relatively few businesses.

To qualify, founders must generally have:

• Held at least 25% of the company's shares and associated rights when the company first started trading (or began preparations to trade)

• Owned those shares for at least five years

• Been UK tax resident for at least five consecutive tax years before the sale

The company must also have:

• Annual turnover of at least £10 million

• At least 15 qualifying full-time equivalent employees

• A substantial UK presence and qualifying trading activities

In addition, the company must pass at least two of three growth and innovation tests:

• Turnover growth: Average compound annual growth of at least 25% over three consecutive accounting periods

• Employee growth: Average compound annual growth of at least 25% in qualifying full-time equivalent employees over three consecutive accounting periods

• R&D investment: At least £1.5 million of qualifying R&D expenditure, supported by valid R&D tax relief claims within the three years before the sale

Is it worth planning for?

For most smaller owner-managed businesses, the thresholds are likely to put Founders’ Relief out of reach. However, for larger and faster-growing businesses, it could offer a valuable tax advantage when planning an eventual sale.

If you are considering selling your business in the next few years, please get in touch to discuss your plans and the tax implications.

Founders’ Relief is currently a proposal, subject to technical consultation closing on 30 November 2026. The final rules may change.

Further reading:  Founders' Relief