Investors relief calculator, 2026/27

How this is calculated

Investors' Relief works much like Business Asset Disposal Relief but is aimed at external, largely passive investors rather than working owner-managers. Qualifying gains are taxed at 18.0%, up to a separate lifetime limit of £1,000,000, which does not share the same cap as Business Asset Disposal Relief, so an individual could in principle use both reliefs on different disposals.

To qualify, the shares must be new ordinary shares issued to the investor directly by an unlisted trading company (or the holding company of a trading group) in exchange for cash, and held continuously for at least three years starting from 6 April 2016 or the date of issue if later.

Unlike Business Asset Disposal Relief, there is no minimum shareholding percentage and, importantly, the investor (and connected people) must not be a paid officer or employee of the company at any time in the period they hold the shares, other than in narrow circumstances such as becoming an unpaid director after investing.

Why this relief exists

Investors' Relief was introduced to encourage external capital into unlisted trading businesses from people who are not going to work in the company, filling a gap left by Business Asset Disposal Relief's employee/director and 5% shareholding requirements.

It is most relevant to business angels, family members providing outside capital, and other passive investors who subscribe for new shares rather than buying existing shares from another shareholder, since the relief only applies to newly issued shares acquired for cash.

Interaction with other reliefs

Investors' Relief cannot be claimed on shares that already qualify for EIS or SEIS income tax relief on the same subscription, since those schemes have their own, generally more generous, capital gains treatment including potential full exemption.

Investors should check eligibility carefully before relying on either relief, since becoming a paid director or employee of the company at any point during the holding period can disqualify shares from Investors' Relief even if all other conditions are met.

Can I claim both Investors' Relief and Business Asset Disposal Relief?

Yes, they have separate lifetime limits, so it is possible to use both reliefs across different qualifying disposals, though a single disposal will only qualify for one or the other depending on the shareholder's role and shareholding.

Do I need to be a director to claim Investors' Relief?

No, and in fact being a paid officer or employee of the company generally disqualifies you from claiming Investors' Relief on those shares, which is the key difference from Business Asset Disposal Relief.

What is the minimum holding period?

Shares must be held continuously for at least three years, starting no earlier than 6 April 2016, before they can qualify for the reduced rate on disposal.

Do existing shares bought from another shareholder qualify?

No, only new ordinary shares subscribed for cash directly from the company qualify for Investors' Relief; buying shares second-hand from an existing shareholder does not meet the conditions.