Answers · UK 2025/26
What is the Business Asset Disposal Relief rate from April 2026?
From 6 April 2026, Business Asset Disposal Relief (BADR) is charged at 18% -- up from 14% which applied from 6 April 2025 to 5 April 2026. BADR applies to the first £1,000,000 of qualifying lifetime gains (the lifetime limit) on disposals of business assets such as shares in a personal company or business goodwill.
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Business Asset Disposal Relief (BADR) -- formerly known as Entrepreneurs' Relief -- is a CGT relief that applies a reduced rate to qualifying gains made on the disposal of business assets. It was significantly reformed in the October 2024 Budget. **BADR Rate History and 2026 Change** | Period | BADR Rate | |---|---| | Before 6 April 2025 | 10% | | 6 April 2025 -- 5 April 2026 | 14% | | From 6 April 2026 | **18%** | The April 2024 Budget announced a two-step increase, aligning BADR more closely with the standard CGT rates (now 18% basic / 24% higher for most assets). From 6 April 2026, the BADR rate equals the basic-rate CGT rate. **Lifetime Limit** BADR applies to the first **£1,000,000** of qualifying lifetime gains. This limit was reduced from £10,000,000 in March 2020. Gains above the £1,000,000 lifetime limit are taxed at standard CGT rates. **What qualifies for BADR?** 1. Disposal of all or part of a trading business (sole trader or partnership) 2. Disposal of assets following cessation of a trading business 3. Disposal of shares in a personal trading company (must hold at least 5% of ordinary shares and voting rights, be an employee or officer, and hold the shares for at least 2 years) 4. Disposal of business assets held personally and used in a partnership or personal company (associated disposal) **Worked Example -- £500,000 qualifying gain, April 2026** Without BADR: Standard CGT rate for a higher-rate taxpayer: 24% x £497,000 (after £3,000 AEA) = £119,280 With BADR: 18% x £497,000 = **£89,460** BADR saving vs higher rate: £119,280 - £89,460 = **£29,820** **Important: the 18% rate from April 2026 removes the advantage for basic-rate taxpayers** A basic-rate taxpayer's standard CGT rate on most assets (non-property) from October 2024 is also 18%, meaning BADR offers no saving for gains that would otherwise be taxed at 18%. BADR remains beneficial only where gains fall into the higher (24%) band.
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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.