The press has been full of speculation about the future of entrepreneurs’ relief ever since the IFS published its observation that the relief disproportionately benefits the wealthy and does not boost investment.

Despite the promise in the Conservative manifesto to “review and reform” entrepreneurs' relief, there has been much speculation in the press that entrepreneurs' relief will be abolished. This would be a surprising move for a Conservative government, especially given the outcry when business asset taper relief was abolished, which resulted in the introduction of entrepreneurs' relief.

In our view, the more likely outcome is that entrepreneurs' relief will be reformed. There are various options open to the Chancellor. One of these might be to reducing the £10 million limit - perhaps to link it to the pensions lifetime allowance, increasing the 10% rate and increasing the two year holding period. Or perhaps a more fundamental reform aimed at encouraging serial re-investment.

While many business owners will be content to adopt a “wait and see” approach, others will want to lock in the value of their ER now. To do that it would be necessary to trigger a disposal before the changes take effect, which would ordinarily be the start of a tax year (6 April 2020). However, the government may introduce anti-forestalling measures to ensure that the changes take effect from announcement. If it does, any disposal would have to be triggered before 11 March 2020 (Budget day). Business owners therefore need to act quickly.