The Quoted Companies Alliance welcomes the Government’s announcement that the qualifying rules of Entrepreneurs’ Relief will be changed to ensure that entrepreneurs are not discouraged from seeking external investment through the dilution of their shareholding. Allowing founding entrepreneurs to elect to be treated as disposing of and reacquiring their shares at the then market-value will enable new funding to be raised and stimulate further investment in small, growing companies.
Tim Ward, Chief Executive of the Quoted Companies Alliance, said: “The Government’s renewed commitment to incentivising entrepreneurs to grow their business sends a strong signal that the UK values those prepared to take a high risk in investing in growth companies. We have patiently and persistently campaigned on this aspect of Entrepreneurs’ Relief reform. This change will remove a major obstacle for growth in small and mid-size quoted companies and end the anomaly whereby entrepreneurs who want to grow their businesses by introducing new shareholders can find themselves at a significant tax disadvantage to external investors. We look forward to supporting the Government to refine the technical detail of the rule change.”
The Quoted Companies Alliance’s proposals for taxation reform are available at: www.theqca.com/autumnbudget2017
Click here to download release (pdf)