What is the Business Asset Disposal Relief CGT rate in 2026/27?

Full answer

Business Asset Disposal Relief (BADR) CGT Rate in 2026/27 Business Asset Disposal Relief -- previously known as Entrepreneurs' Relief -- reduces the rate of Capital Gains Tax payable when you sell or dispose of a qualifying business asset. For 2026/27, the BADR rate is 18%. Rate History and the April 2026 Change BADR was 10% until October 2024, when it rose to 14% following the Autumn 2024 Budget. From 6 April 2026 it increased again to 18%. Despite the rise, the 18% BADR rate remains meaningfully lower than the standard CGT rates of 18% (basic rate) and 24% (higher rate) on most assets -- though at 18% BADR now equals the basic rate band CGT rate for other assets, the key advantage is that it applies regardless of whether the gain falls in the basic or higher rate band. Lifetime Limit BADR applies to a cumulative lifetime limit of GBP 1,000,000 of qualifying gains. Gains above the lifetime limit are taxed at standard CGT rates (18% basic / 24% higher rate for most assets in 2026/27). Annual Exempt Amount The CGT Annual Exempt Amount (AEA) is GBP 3,000 for 2026/27. This is deducted from your total gains before calculating any CGT, including under BADR. Qualifying Conditions To claim BADR you generally must: - Be selling all or part of a trading business you own, or shares in a qualifying company - Have owned the asset for at least two years before disposal - For company shares: hold at least 5% of ordinary share capital and voting rights, and be an employee or officer of the company BADR does not apply to investment properties or holding companies that are not trading. Planning Considerations If you plan to sell a business, the timing of disposal relative to the April 2026 rate change matters. Gains realised before 6 April 2026 qualified at 14%; those from 6 April 2026 onward are taxed at 18%. If your cumulative BADR gains have not reached GBP 1,000,000, any remaining headroom still benefits from the 18% rate. Consult a tax adviser well in advance of any sale to optimise the disposal structure.

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