Treasury Still Setting Founders’ Relief Details Before 30 November Consultation Close

On Wednesday, 11 November 2026, Chancellor John Healey told the Treasury Committee that the government was doing a “rapid technical piece of work” to set the details of Founders’ Relief by the end of November. Professional Adviser reported the remarks on 12 November. The relief was announced in the Autumn Budget and would apply a 10% rate to qualifying share gains, up to a lifetime limit of £10 million.

The proposals remain open to consultation and the final design has not been set. The consultation closes at 11:59pm on 30 November 2026.

What HM Treasury Has Published So Far

HM Treasury published its Founders’ Relief technical consultation on 28 October 2026. The government describes the relief as intended for founders and significant early investors in high-growth, innovative UK companies. The proposed rate is 10%, with a lifetime limit of £10 million of gains per individual. The relief would apply to qualifying disposals made on or after 6 April 2027.

Financial News compares the proposed rate with the 18% or 24% rates that currently apply to gains on shares that do not qualify for other business reliefs. The consultation covers how the proposed individual, company, and growth and innovation conditions would work in practice. Responses go to EnterpriseTax@hmtreasury.gov.uk.

The government plans to introduce legislation in the Finance Bill 2026-27. It will use the responses to finalise the design.

BADR Limit Change
The Business Asset Disposal Relief lifetime limit falls from £1 million to £500,000 for disposals from 6 April 2027, according to Financial News.

Eligibility Tests Under Discussion

Financial News, which reported the proposals on 3 November 2026, sets out the main tests for the first disposal. An individual must have held 25% of the company’s ordinary share capital when its trading activity, or preparation for it, began. The shares must be held for at least five tax years before disposal, and the individual must have been UK resident for at least five continuous tax years.

The company must have a substantial UK presence for the five accounting periods before disposal. It must be a trading company, or the holding company of a trading group. Sectors excluded from the Enterprise Investment Scheme, such as land dealing, financial services and property development, do not qualify. Financial News says companies may be listed or unlisted.

Later disposals face further tests. The company needs turnover of at least £10 million, and at least 15 qualifying full-time equivalent employees, in the accounting period ending the year before disposal. It also needs two of three growth and innovation tests met within the 10 years before disposal. Among the tests the report describes are annual average compound growth of 25% in turnover or staff across three consecutive accounting periods, and at least £1.5 million of qualifying R&D spending, with tax relief claimed, in the three years before disposal.

Business Asset Disposal Relief Lifetime Limit Falls

Financial News reports that the lifetime limit for Business Asset Disposal Relief falls from £1 million to £500,000 for disposals from 6 April 2027. Financial News says about 13,000 of roughly 51,000 BADR claimants are expected to be affected, because some gains that previously qualified will no longer do so.

Financial News reports that the £10 million Founders’ Relief cap will be reduced by any BADR and Investors’ Relief claims made from 6 April 2027. The Treasury says the BADR change aims to ensure that three-quarters of claimants still receive relief on their entire gain, while supporting businesses as they start up and grow. Financial News also reports a Treasury estimate that about 600 individuals a year will be eligible for Founders’ Relief, across about 400 businesses.

Financial News reproduces an OBR-certified table in £ million. It shows Founders’ Relief as minus £260 million in the 2027–28 tax year and minus £300 million in the 2031–32 tax year. For the BADR change, it shows plus £60 million in the 2027–28 tax year and plus £305 million in the 2031–32 tax year. The Treasury also says HMRC’s processes and IT systems will need changes for the new relief, and that its full impacts are still being assessed.

The proposed rate is 10%, with a lifetime limit of £10 million of gains per individual.

Parliamentary Scrutiny and the Next Steps

At the 11 November session, John Glen, Conservative MP for Salisbury, criticised the policy. Professional Adviser reports that Glen described a review of it by Helen Miller, director of the Institute for Fiscal Studies, as “scathing”. Healey also said he had considered revising the reduction in tax relief for venture capital trust investors.

Healey said the government is doing technical work until the end of November to settle the details. The consultation closes on 30 November 2026, and the government will use the responses to finalise the design.

The conditions are still proposals rather than settled rules. Legislation is due in the Finance Bill 2026-27. The full consultation document, linked from the GOV.UK page, runs to 18 pages.