Answers · UK 2025/26
What is the Business Asset Disposal Relief lifetime limit in the UK for 2026/27?
Business Asset Disposal Relief (BADR) has a lifetime limit of £1,000,000. Qualifying gains are taxed at 14% for 2025/26 (rising to 18% from April 2026 onwards). Conditions include owning at least 5% of shares, being an officer or employee for 2 years, and the company being a trading company.
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Business Asset Disposal Relief (BADR) -- formerly Entrepreneurs' Relief -- reduces Capital Gains Tax on qualifying disposals of business assets. Key facts for 2026/27: - Lifetime limit: £1,000,000 (unchanged since 2020) - CGT rate on qualifying gains: 18% for 2026/27 (increased from 10% in the October 2024 Budget; the 14% transitional rate applied for 2025/26) - Standard CGT rate for higher-rate taxpayers on other assets: 24% What qualifies: 1. Shares in your own company: - You must own at least 5% of ordinary shares and 5% of voting rights. - You must be an officer or employee of the company for at least 2 years before disposal. - The company must be a qualifying trading company (not mainly investment-based). 2. Sole trader and partnership assets: - Disposal of all or part of a business you have operated for at least 2 years. - Assets used in the business throughout the 2 years prior to cessation. 3. Associated disposals: - Personal assets used in your own company or partnership may qualify alongside a disposal of shares or partnership interest. Lifetime limit: - The £1,000,000 is cumulative over your lifetime across all qualifying disposals. - HMRC tracks how much BADR you have used. Once you have claimed relief on £1,000,000 of gains, no further BADR is available. Planning points: - Time disposals carefully -- gains above the lifetime limit are taxed at standard CGT rates (24% for higher-rate taxpayers in 2026/27). - Spouses and civil partners each have their own separate £1,000,000 lifetime limit.
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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.