What’s Changing and When
From 6 April 2026, the rates for Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) will increase from the current 14% to 18% for qualifying capital gains. (uktaxpolicymap.com) These reliefs are subject to a lifetime cap—currently £1 million of gains per individual. (gov.uk)
Who Qualifies for BADR & IR
You may be eligible if you’re disposing of:
- all or part of a business, or shares in a trading company
- shares you subscribed for if you qualify for Investors’ Relief, subject to certain criteria such as not being a paid director or employee. (uktaxpolicymap.com)
Risks & Why Timing Matters
- Disposals after 5 April 2026 will face the higher 18% rate if relief conditions are met. Prior to that date, the rate remains at 14%. (uktaxpolicymap.com)
- Mis-timed disposals could result in paying up to 4% more in CGT on relief-eligible gains. That can be thousands depending on the size of the gain.
- Claims for relief need to meet ALL qualifying conditions (holding period, trading status, personal company status) – failure to keep these could lead to relief being denied entirely or taxed at the higher rate. (boodlehatfield.com)
Planning Strategies Before 6 April 2026
- Accelerate disposals. If you’re planning to sell business assets or shares eligible for BADR or IR, doing so before the deadline could lock in the lower rate.
- Check ownership structure. Ensure the business is a trading company and that your role qualifies under the relief rules.
- Review lifetime cap usage. If you’ve used up much of your £1 million cap, consider spreading disposals across individuals or years.
- Incorporation relief claims. For disposals into companies, from 6 April 2026 you must actively claim incorporation relief within your Self Assessment tax return—it will no longer apply automatically. (accountingweb.co.uk)
Example Scenarios
| Scenario | Before 6 April 2026 | After 6 April 2026 |
|---|---|---|
| A small business owner sells qualifying shares gaining £800,000. Uses BADR. | CGT at 14% → tax = £112,000 | |
| Same sale AFTER 6 April 2026 with identical eligibility. | CGT at 18% → tax = £144,000 |
Another taxpayer disposes part of a business but doesn't meet holding period by April 2026—relief may be denied, so CGT applies at main rates of 18% or 24% depending on income level. (boodlehatfield.com)
Key Takeaways
- The rate change is real and mandatory: 14% → 18% from 6 April 2026. (uktaxpolicymap.com)
- Time is tight—moves in the next few months could dramatically reduce tax costs.
- Ensure eligibility conditions are met: personal company, holding periods, and correct relief classification.
- Seek professional advice to ensure all angles—especially around incorporation relief—are properly handled.