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This guidance note discusses the application of business asset disposal relief (BADR) for sole traders only. Business asset disposal relief (BADR) is a capital gains tax (CGT) relief that allows business owners with chargeable gains on qualifying business assets to pay CGT at a rate of 10%. The relief is available on up to £1m of capital gains for each individual over their lifetime.

The rate of BADR will increase to 14% for disposals made on or after 6 April 2025, and from 14% to 18% for disposals made on or after 6 April 2026.

There are anti-forestalling rules which will apply due to the changes in general CGT rates from 30 October 2024 and the phased changes in BADR rates from 6 April 2025. For details, see the Conditions for business asset disposal relief guidance note.

See also the following guidance notes:

1. •

   Conditions for business asset disposal relief

2. •

   Business asset disposal relief for partnerships

3. •

   Business asset disposal relief on shares and securities

4. •

   Maximising business asset disposal relief

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