Business Asset Disposal Relief rose from 14% to 18% on 6 April 2026. Here is what that means if you are selling a business, closing a company, or planning an exit.
Business Asset Disposal Relief rose from 14% to 18% on 6 April 2026. Here is what that means if you are selling a business, closing a company, or planning an exit.
Business Asset Disposal Relief (BADR) — formerly Entrepreneurs' Relief — lets you pay a reduced rate of Capital Gains Tax when you sell qualifying business assets. From 6 April 2026, that reduced rate increased from 14% to 18%.
This is the second increase in two years. The rate was 10% until April 2025, rose to 14%, and has now reached 18%. The lifetime limit remains at £1 million of qualifying gains.
| Period | BADR Rate | Tax on £500k Gain | Tax on £1m Gain |
|---|---|---|---|
| Before April 2025 | 10% | £50,000 | £100,000 |
| April 2025 – March 2026 | 14% | £70,000 | £140,000 |
| April 2026 onwards | 18% | £90,000 | £180,000 |
| Without BADR (higher rate) | 24% | £120,000 | £240,000 |
BADR at 18% still saves you money compared to the standard 24% CGT rate. On a £1 million gain, you save £60,000. The relief is less generous than before, but it remains well worth claiming.
The rate increase affects anyone disposing of qualifying business assets from 6 April 2026 onwards. This includes:
To claim BADR on shares in your company, you must meet all of these conditions for at least 2 years before the disposal:
HMRC introduced new "excluded contract" rules for disposals after 6 April 2026. If you signed a contract before the deadline specifically to lock in the lower 14% rate, and the parties are connected or the contract was created for a tax advantage, HMRC may apply the 18% rate instead. There is a £100,000 de minimis threshold below which no claim is needed.
If you are a contractor winding down your limited company, your route to closing the business determines how the reserves are taxed:
An MVL typically costs £1,500–£3,000 in liquidator fees. For reserves above £40,000, the tax saving almost always exceeds the cost.
From 6 April 2026, Business Asset Disposal Relief is taxed at 18% on qualifying gains up to the £1 million lifetime limit. This is up from 14% in 2025/26 and 10% before that. Gains above £1 million are taxed at the standard CGT rate of 24% for higher-rate taxpayers.
Yes. BADR still exists and offers a meaningful saving — 18% vs the standard 24% CGT rate. On a £500,000 qualifying gain, you save £30,000 compared to paying the full CGT rate.
At the 18% rate, BADR saves £60,000 on a £1 million qualifying gain compared to the standard 24% CGT rate. The tax bill would be £180,000 with BADR vs £240,000 without.
Yes, but only if you close via a Members' Voluntary Liquidation (MVL). Distributions via informal strike-off are treated as income, not capital gains, so BADR does not apply. For reserves above £25,000, an MVL is required.
You can claim BADR on the sale of shares in a personal trading company (where you own at least 5% of shares and voting rights for 2+ years), the disposal of a whole business or part of a business, and certain qualifying business assets. You must also be an officer or employee of the company.
We can model your BADR position and find the most tax-efficient route — whether that is a sale, MVL, or restructure. From £19.99/month.
This article is for general information only and does not constitute tax advice. Please consult a qualified accountant for advice specific to your circumstances.
Official guidance
For the latest HMRC and Companies House guidance, see Business Asset Disposal Relief. AccTek Ltd is an independent accountancy firm and is not affiliated with HMRC or GOV.UK.
AccTek is a member firm of the Institute of Certified Practising Accountants (ICPA). Our accountants have a wide range of qualifications and accreditations from trusted professional bodies such as the AAT, ICPA, and ACCA.
