Chancellor John Healey’s first Budget, delivered on 28 October 2026, announced a new Founders’ Relief for founders of, and significant early investors in, high-growth and innovative UK companies. Under the proposal, qualifying disposals of shares would be charged at 10% capital gains tax, up to a lifetime limit of £10 million of gains for each individual. The relief would apply to qualifying disposals made on or after 6 April 2027, with legislation planned for Finance Bill 2026–27.

A new relief for company founders

The government published a technical consultation on the same day, closing on 30 November 2026, asking how the proposed conditions should work in practice. The draft conditions reported in the consultation include holding 25% of the company’s ordinary share capital when its trade, or preparation for it, began, holding the shares for at least five years before disposal, and being UK resident for at least five continuous tax years before disposal. The consultation also covers administration and compliance, meaning the final design could still change.

A tighter limit elsewhere

Founders’ Relief sits alongside a cut to an existing relief. Business Asset Disposal Relief, which reduces capital gains tax on selling all or part of a qualifying business, will have its lifetime limit reduced from £1 million to £500,000 for disposals made on or after 6 April 2027. Amounts claimed under that relief and Investors’ Relief from 6 April 2027 would reduce the £10 million Founders’ Relief limit. Founders considering a sale should therefore compare both reliefs carefully, rather than assuming the new 10% rate will apply in full to every disposal.

Sources: GOV.UK Founders’ Relief consultation, CMS.