Received an HMRC investors’ relief letter? What it means and what to do next
If you have claimed Investors’ Relief on a recent Self Assessment tax return and have now received a letter from HMRC, you are not alone. In December 2025, HMRC launched a one-to-many campaign focused on Investors’ Relief claims for the tax year ending 5 April 2025. These letters are often called nudge letters and are designed to prompt taxpayers to double check their claims before HMRC takes things further.
Receiving a letter like this can feel unsettling, especially if you believed your tax return was correct. The good news is that a nudge letter does not automatically mean HMRC thinks you have done something wrong. It is an opportunity to review your position, correct anything that needs correcting, and reduce the risk of penalties later.
This blog explains what HMRC is saying in these Investors’ Relief letters, why you may have received one, and what practical steps you should take next, based directly on the content of the December 2025 letters .
What exactly does HMRC say about Investors’ Relief nudge letters?
HMRC’s letters are focused on one clear message: please check your Investors’ Relief claim for the year ending 5 April 2025.
In the first version of the letter, HMRC explains that you have made a claim for Investors’ Relief on the Capital Gains Tax page of your Self Assessment return. They then set out the qualifying conditions for Investors’ Relief and ask you to review whether your share disposal meets those rules
Investors’ Relief is a Capital Gains Tax relief available when you dispose of shares in a trading company. Where it applies, qualifying gains are taxed at 10%. However, the conditions are strict. HMRC outlines that the shares must have been subscribed for in cash and paid for in full when issued. You must have owned them for at least three years and not have been an employee of the company or a connected company. The shares need to be ordinary shares, issued on or after 17 March 2016, and sold on or after 6 April 2019. The company itself must be a trading company or the holding company of a trading group, and its shares must not be listed on a stock exchange.
In the second version of the letter, HMRC goes a step further. It says that their records show you have not provided a Capital Gains Tax computation or enough information to show that the Investors’ Relief conditions are met. As a result, HMRC states that they cannot currently accept your claim and may need to apply additional tax unless you amend your return or provide more details.
What prompted HMRC to send you a nudge letter?
HMRC uses data matching and risk profiling to identify tax returns that may need further review. In this campaign, the triggers are usually one of the following:
You may have claimed Investors’ Relief without including a full Capital Gains Tax computation. Alternatively, the figures or information provided may not clearly demonstrate that all the qualifying conditions have been met.
In some cases, the disposal date, acquisition date, or share details may raise questions. HMRC is also paying closer attention to Investors’ Relief claims because Capital Gains Tax rates have increased for disposals made on or after 30 October 2025. For those disposals, the main rates rose from 10% to 18% and from 20% to 24%. If an Investors’ Relief claim is reduced or removed, the extra tax can be significant.
Importantly, a nudge letter does not mean HMRC has opened a formal enquiry. It means they are giving you a chance to check things voluntarily before deciding whether to take compliance action.
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What should you do if you receive a nudge letter?
The first step is not to panic and not to ignore the letter.
HMRC asks you to review your Investors’ Relief claim carefully against the qualifying conditions. If, after checking, you believe your claim is correct, you should tell HMRC. You can do this by writing to them or by emailing the address provided in the letter. HMRC makes it clear that they cannot correct your return over the phone, but they can record that you have reviewed the claim.
If you find that your claim is incorrect or incomplete, you should amend your Self Assessment tax return. HMRC usually gives you 30 days from the date of the letter to make any amendments. Amending your return promptly can make a real difference to how HMRC treats the situation later.
In the second letter, HMRC specifically asks for details such as the company name, acquisition date, cost, disposal date, and disposal proceeds if you want to support your claim rather than remove it.
Penalties
If HMRC later carries out a compliance check and finds that your Self Assessment return is incorrect, they may charge penalties. These penalties are linked to inaccuracies in returns or documents.
HMRC explains that if you did not correct the return before receiving the letter, any disclosure you now make will be treated as prompted. Prompted disclosures can still reduce penalties, but not as much as unprompted ones.
Interest may also be charged on any tax paid late. This applies whether you amend your return yourself or HMRC amends it following a compliance check.
Ways for penalty reduction
Keeping penalties down often comes down to acting early and being open with HMRC.
Correcting your return within the 30-day window mentioned in the letter is a good place to start. Being honest and giving HMRC all the necessary information can also help. They look at behaviour when setting penalties, including whether the mistake was careless or deliberate and how quickly you took action once it was identified.
Although any disclosure now is treated as prompted, it can still result in lower penalties than waiting for HMRC to step in and amend the return themselves.
How can an accountant help?
Investors’ Relief can be tricky, and it is easy to miss small details that affect whether a claim is valid. An accountant can go through your share disposal properly, check each condition, and confirm whether the relief genuinely applies.
If changes are needed, an accountant can amend your return accurately and make sure the Capital Gains Tax figures are recalculated using the correct rates. They can also prepare or check your CGT workings and deal with HMRC for you, which often takes a lot of pressure off.
If HMRC decides to carry out a compliance check, having an accountant involved can make the whole process much smoother and help ensure your position is properly protected.
Author
Mukund is a founding member of the Affinity Associates Group and has been with the practice for nearly 40 years. After completing his degree in Accounting and Finance, he went on to qualify with both ACCA and ICAEW in 1991. Over the years, he’s built deep expertise in consultancy, tax, business development, and corporate group structures. Mukund is known for helping clients make sense of complex financial challenges and turning them into opportunities for sustainable growth.
