What’s Changed with Business Asset Disposal Relief (BADR)
From 6 April 2026, the rate of Capital Gains Tax under Business Asset Disposal Relief on qualifying asset disposals rises to 18%. (gov.uk)
- If you disposed between 6 April 2025 and 5 April 2026, the rate remains at 14%. (gov.uk)
- Disposals made on or before 5 April 2025 enjoyed the 10% rate. (gov.uk)
Who’s Affected and When Planning Matters
- Sole traders, partnerships, and shareholders in “personal companies” are eligible.
- Conditions include owning the business for at least 2 years before sale or disposal, or the business having ceased within a 3-year window in certain cases. (gov.uk)
If you're considerando selling now, getting contracts completed before 6 April 2026 could lock in the 14% rate, subject to anti-forestalling rules. Contracts entered into before that date but completing later may still fall under 18%, unless they qualify as “excluded contracts” under those rules. (gov.uk)
Actionable Steps for Planning
- Review current planned disposals: if possible, accelerate them to complete on or before 5 April 2026. If contracts are not yet in place, see if they can be started before the deadline.
- Ensure qualifying conditions are met: two-year ownership, company qualifying as trading, minimum shareholding, etc.
- Check lifetime limit: the lifetime gain eligible remains significant—ensure previous gains under BADR haven’t used up the limit. (gov.uk)
- Anti-forestalling documentation: if relying on excluded contracts or special circumstances, ensure evidence is kept in case HMRC questions timing. The rules require commercial substance. (gov.uk)
- Get professional valuations: where asset disposals or share valuations are involved, formal valuations may support eligibility and timing.
Planning Examples
- A business owner intending to sell her shares should aim to exchange contracts by mid-March 2026 and complete by early April to hit the lower BADR rate (if all other conditions are satisfied).
- A partner in a trading business with substantial business asset values—if separating from the company after April, expect 18% rate unless disposing before the fiscal date.
Implications • ODds Books and Risks
- Higher CGT bills on disposals after 6 April 2026; what once was 14% becomes 18%.
- Valuation risk: share dilution or company status changes could disqualify relief.
- Lifetime relief limit—once exceeded, excess gains taxed at standard CGT rates.
BADR remains a very powerful relief for entrepreneurs—but these timing and qualifying tweaks make strategic planning essential if you're considering disposing of business assets soon.