5.7.1 Qualifying for the relief

The following sections highlight some common issues with employee shares. A comprehensive discussion of entrepreneursʼ relief (‘ER’) is beyond the scope of this book (but see Entrepreneursʼ Relief, available from Claritax Books).

Employees are able to qualify for ER provided that they hold shares in a qualifying company for at least a year ending on the date of sale and, throughout that time, they meet the following conditions:

they hold at least 5% of the companyʼs ordinary share capital; and

they are able to exercise 5% of the voting rights in the company by virtue of their shareholdings.

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