Tax Planning
How to Navigate the Rise in BADR & Investors’ Relief Rates Before April 2026
Capital Gains Tax reliefs for business disposals are rising—learn timing strategies, eligibility details, and how to plan before 6 April 2026 to avoid sharper tax burdens.
By NomadicTax Research Team • 5-8 min read • February 22, 2026
## 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](https://www.uktaxpolicymap.com/taxing-work-and-wealth/business-asset-disposal-relief-and-investors--relief-rate-increase.aspx?utm_source=openai)) These reliefs are subject to a lifetime cap—currently **£1 million** of gains per individual. ([gov.uk](https://www.gov.uk/government/statistics/tax-reliefs/tax-relief-statistics-january-2026?utm_source=openai))
## 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](https://www.uktaxpolicymap.com/taxing-work-and-wealth/business-asset-disposal-relief-and-investors--relief-rate-increase.aspx?utm_source=openai))
## 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](https://www.uktaxpolicymap.com/taxing-work-and-wealth/business-asset-disposal-relief-and-investors--relief-rate-increase.aspx?utm_source=openai))
- 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](https://www.boodlehatfield.com/articles/business-and-property-taxation/?utm_source=openai))
## 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](https://www.accountingweb.co.uk/tax/personal-tax/capital-gains-tax-reliefs-reduced-in-budget?utm_source=openai))
## 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](https://www.boodlehatfield.com/articles/business-and-property-taxation/?utm_source=openai))
## Key Takeaways
- The rate change is real and mandatory: 14% → **18% from 6 April 2026**. ([uktaxpolicymap.com](https://www.uktaxpolicymap.com/taxing-work-and-wealth/business-asset-disposal-relief-and-investors--relief-rate-increase.aspx?utm_source=openai))
- 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.