Entrepreneurs’ relief: Hammond’s disappearing trick

In his Budget speech last month, the chancellor confirmed that entrepreneurs’ relief is here to stay; indeed, Hammond stated that encouraging UK entrepreneurs is ‘at the heart’ of the government’s strategy. However, there were two twists that, for many, made the relief disappear: the first was to double the qualifying holding period; the second, more dramatic change, was to impose a new 5% economic interest test. Both new requirements have some surprising results and catch existing structures and future planning. Practitioners will need to review advice given to clients who are expecting to benefit from entrepreneurs’ relief.