What is Business Asset Disposal Relief (formerly Entrepreneurs Relief) in 2026/27?

Full answer

Business Asset Disposal Relief (BADR) was formerly known as Entrepreneurs' Relief until it was renamed in April 2020. It provides a reduced Capital Gains Tax rate for qualifying disposals of business assets. **2026/27 BADR rate: 18%** (Increased from 10% to 14% from 30 October 2024 Budget, then further to **18% from 6 April 2026** — aligning with the lower CGT residential property rate.) **Lifetime limit:** £1,000,000 of qualifying gains (unchanged) **Qualifying conditions:** 1. You must have been an **employee or officer** (director) of the company. 2. You must hold at least **5% of the ordinary share capital** and 5% of the voting rights. 3. You must have held the shares for at least **2 years** before disposal. 4. The company must be a **trading company** or holding company of a trading group. 5. All conditions must be met for the 2 years immediately before the disposal. **What qualifies:** - Sale of all or part of a trading business - Sale of shares in your own personal company - Associated disposals of business assets on retirement or wind-up **Investors Relief (IR) — separate from BADR:** Also **18% from April 2026**, IR applies to passive investors in unlisted trading companies who are not employees/directors, holding shares for 3+ years. Lifetime limit: **£10 million**. **How to claim:** Claim on your **Self Assessment return** for the year of disposal. HMRC may require evidence of qualifying conditions. Claims must be made by the first anniversary of the 31 January following the end of the tax year of disposal.

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