Understanding whether your business is on track for Founders' Relief
The proposed Founders’ Relief could make a future exit more rewarding, with a proposed 10% Capital Gains Tax rate on qualifying gains, subject to a £10 million lifetime limit per individual, for disposals from 6 April 2027. The potential tax saving for an individual making a qualifying disposal under Founders’ Relief at £10 million compared to claiming Business Asset Disposal Relief on the same disposal is just under £1.4 million.
There is therefore an opportunity to understand where you stand and avoid unintentionally closing doors as your business grows. You do not need to plan a sale today to start that conversation.
Some proposed conditions look back to the business’s earliest days; others depend on growth, investment and the timing of an eventual disposal. Your history may already provide part of the evidence needed.
30th October 2026
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Kathryn Hill See profile
Keep this relief in view as your business evolves
Funding rounds, employee incentives, acquisitions, changes in your trade and group reorganisations can all raise questions about future eligibility.
The proposals appear to allow dilution after the initial qualifying stake, but important details remain unresolved. Reviewing significant decisions with us can help identify implications before you commit.
This is about supporting you with commercial decisions regular reviews can help you track qualifying periods, retain evidence and understand when growth or R&D activity could fall outside the relevant look-back windows, keeping more options open along your journey.
Check where you stand today
Under the proposals, the new conditions include:
- Your founding stake: at least 25% of ordinary share capital, with the required voting and economic rights, when trading or preparations began, alongside five-year shareholding and continuous UK tax-residence requirements.
- Your business: qualifying trading status, UK presence and Corporation Tax conditions, plus at least £10 million turnover and 15 qualifying full-time employees.
- Your growth and innovation record: at least two of the turnover growth, qualifying employee growth and qualifying R&D tests, each with its own thresholds and measurement windows.
Could your history already put you on track?
Speak to us for an initial review of your history and discussion of future plans. We can work with you to assess which proposed conditions you may already have met, identify gaps and consider how upcoming decisions could affect your position. Whether an exit is approaching or years away, now is an opportunity to understand what you have already achieved and what to keep in view.
Our joined-up approach also means we can bring tax and financial planning expertise together as your plans develop, helping you consider both the structure of a future exit and what it could mean for your personal finances and longer-term goals. Speak to Kathryn Hill or your usual Old Mill adviser.
Based on the proposals described in this draft. Founders’ Relief remains subject to consultation and final legislation; meeting historic conditions alone does not establish entitlement on a future disposal.