Answers · UK 2025/26
What is Business Asset Disposal Relief (BADR)?
Business Asset Disposal Relief (formerly Entrepreneurs' Relief) gives qualifying business owners a reduced CGT rate of 14% (2025/26) on disposals up to a £1m lifetime limit. The rate rises to 18% from 6 April 2026 — a partial reduction of the relief over time.
Full answer
UK Business Asset Disposal Relief (BADR), formerly Entrepreneurs' Relief until 2020. Rate: 14% on qualifying disposals in 2025/26 (raised from 10% by October 2024 Budget), rising to 18% from 6 April 2026. Lifetime limit: £1m of gains (cut from £10m in March 2020). Eligibility: sole trader/partner selling all or part of their business; owner of at least 5% of ordinary shares + voting rights in a personal trading company AND officer/employee of that company; the qualifying conditions must be met for at least 2 years before disposal. Includes: trading companies (not property letting), goodwill (limited), associated disposals of business assets. Excludes: passive investment companies, property holding companies, most furnished holiday lets after April 2025. Claim via Self Assessment within 4 years of the tax year end. Combined with Investors' Relief (also 14%/£1m lifetime), business owners now face lower-than-before but still favourable CGT compared to the main 24% rate. Consider crystallising gains before April 2026 if planning to sell.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.