This is a Capital Gains Tax (CGT) relief which can be claimed on qualifying business disposals by individuals (not companies). It reduces the rate of CGT on the disposal of assets to 10%. There are anti avoidance rules which apply to the repayment of share capital.

ER can be claimed for disposals of

all or part of your business as a sole trader or business partner – including the business’s assets after it closed,
shares or securities in a company where you have at least 5% of shares and voting rights (known as a ‘personal company’),
shares you got through an Enterprise Management Incentive (EMI) scheme after 5 April 2013,
assets you lent to your business or personal company.
There are anti avoidance restrictions if within two years the individual (or an associate) starts up a similar trade or activity. In these circumstances, the distribution is treated as income.

If you’re selling all or part of your business

Both the following must apply:
you’re a sole trader or business partner,
you’ve owned the business for at least one year before the date you sell it.
The same conditions apply if you’re closing your business instead. You must also dispose of your business assets within 3 years to qualify for relief.

If you’re selling shares or securities

Both the following must apply for at least one year before you sell your shares:
you’re an employee of the company,
the company’s main activities are in trading (rather than non-trading activities like investment) – or it’s the holding company of a trading group.
Either of the following must also apply for at least one year before you sell your shares:
you have at least 5% of shares and voting rights in the company,
you were given the option to buy them at least one year before you’re selling them – if they’re EMI shares.
If the company stops being a trading company, you can still qualify for relief if you sell your shares within 3 years.

If you’re selling assets you lent to the business.

Both the following must apply:
you’ve sold at least 5% of your part of a business partnership or your shares in a personal company,
you owned the assets but let your business partnership or personal company use them for at least one year up to the date you sold your business or shares – or the date the business closed.