Entrepreneurs’ relief: HMRC relents on changes

In his Budget speech the chancellor proposed important changes to the definition of ‘personal company’ for the purposes of entrepreneurs’ relief supposedly the better to target the relief on ‘genuine entrepreneurs’ by limiting the relief to individuals whose economic interest in the company passed a de minimis threshold. This was to be done by adding to the existing requirement of a holding of at least 5% of the ordinary shares carrying at least 5% of the voting rights the further condition that the holding should also entitle the holder to at least 5% of the profits available for distribution to ‘equity holders’ (a term imported from CTA 2010 and encompassing much more than simply holders of ordinary share capital) including in a winding-up. In the Budget Day announcement HMRC offered the...