Entrepreneurs Relief if shares fall under 5%

[ZeroWorld]

Hey There,

In 2019 November, I sold my company to a larger company for shares. When we 'merged' the companies, the parent company value was ~$250mn.

In 2022 January, the larger company was sold to a larger company for cash, resulting in a significant capital gain for me. The acquisition was for ~$400mn.

In the original company, I owned 40% of the company, but when we sold for shares, my share holding % was diluted to underneath 5%.

Originally, I thought that would disqualify me on ER when we disposed of the shares for cash, triggering a capital gain - but I have been reading that may not be the case; https://www.gov.uk/government/publications/entrepreneurs-relief-where-shareholding-diluted-below-the-5-threshold/entrepreneurs-relief-where-shareholding-diluted-below-the-5-threshold

I am going to get proper advice, but I wanted to ask the question here first - could I be onto something?

Many thanks for any thoughts on this folks.

[AGoodman]

Probably not, as that relief is intended to apply when the company issues shares for new investment, rather than a share for share exchange.

However, still worth checking given the sums involved.