Sarah Bradford explains the changes to business asset disposal relief and why timing matters.
Business asset disposal relief (BADR) reduces the rate of capital gains tax (CGT) payable on a qualifying disposal of business assets. The relief (which was formerly known as entrepreneurs’ relief) is available to individuals and some trustees when they dispose of all or part of their business, their business assets or shares in their personal company.
Currently, the relief reduces the rate of CGT on qualifying disposals within the lifetime £1m limit to a very attractive 10%. However, there remains only a small window of opportunity to benefit from this rate. As announced by Rachel Reeves in her first Budget on 30 October 2024, the rate of CGT on assets qualifying for BADR is to rise to 14% from 6 April 2025 and to 18% from 6 April 2026.
Individuals looking to dispose of their business in the near future may wish
