Capital Gains Tax on Entrepreneurs: Should the UK have a ‘Unicorn Relief’?
By Arun Advani, Josh Flew, Sebastian Gazmuri-Barker and Andy Summers (2026)
In November 2025, the Government published a Call for Evidence on Tax Support for Entrepreneurs. Since then, many organisations have called for new or expanded Capital Gains Tax (CGT) reliefs for entrepreneurs. The case for this rests mainly on the effort and innovation entrepreneurs contribute and on a desire to have them build their businesses in the UK. The only CGT relief currently available to founders, Business Asset Disposal Relief (BADR), has been criticised for being both poorly targeted and too small to make a difference to highly successful founders.
CenTax has previously recommended a package of five CGT reforms: equalising rates with Income Tax rates; introducing an Investment Allowance; removing the uplift at death; rebasing on arrival with a deemed disposal on departure (ROA-DDD); and more generous loss relief. Together, these reforms would be better for growth while raising revenue. They would also remove the current incentive for entrepreneurs to emigrate before they sell in order to pay no CGT. We treat this package as the default setting for a neutral CGT system, and as the starting point for any new relief.
This report asks: if the fundamental reforms to CGT that we have previously argued for were adopted, what (if any) additional tax relief should be available to entrepreneurs? We assess the different arguments most commonly made to justify additional CGT reliefs, and use these conclusions to design the best possible targeted-option – Unicorn Relief – which would provide a significantly reduced CGT rate on an uncapped amount of gains, narrowly targeted at entrepreneurs who successfully build very high-value businesses.
We conclude that, if the Government decides it must have a special CGT relief for entrepreneurs, replacing BADR with Unicorn Relief would be significantly better targeted than the status quo, though it would still present drawbacks and risks. It is also no substitute for fundamental CGT reform, which overall would be better for growth as well as raising revenue that the government could spend or use to cut taxes elsewhere.
