Capital Gains Tax- Business Asset Disposal Relief

Business Asset Disposal Relief (BADR) is a relief that charges gains on the disposal of a business, business assets or shares in a personal company at a favourable rate up to your lifetime limit of £1 million. To benefit from the favourable rate, you must have met the qualifying conditions for the two year period to the cessation of your business assets or shares, as appropriate.

Currently, gains qualifying for BADR benefit from a 14% tax rate, regardless of the rate at which you pay tax. This is a saving of 4% or 10% compared to the standard rates, depending whether or not your income and gains exceed the basic rate band. The 14% rate is only available until 5 April 2026. Gains attracting BADR are taxed at 18% from 6 April 2026, saving tax rate of 6% where the gains would otherwise be taxed at the higher capital gains tax rate of 24%.

If you are planning on retiring or ceasing your business in the near future, we can help you understand how your planned retirement date will affect the capital gains tax that you pay.