Maximising business asset disposal relief

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

This guidance note considers some practical and planning points relating to business asset disposal relief (BADR). For guidance on the calculation of and qualifying conditions for BADR, see the Conditions for business assets disposal relief guidance note.

The rate of BADR is 14% for disposals made on or after 6 April 2025 (10% prior to this date) and this will increase to 18% for disposals made on or after 6 April 2026.  Therefore from April 2026, the BADR rate will match the basic rate of CGT.

Spouses’ shares

Spouses and civil partners (hereafter ‘spouse’) are often involved in the running and ownership of owner-managed businesses. This offers a number of benefits with regards to tax planning, in particular making the use of two individuals’ entitlement to allowances and entitlement to reliefs which have a limit for each individual. BADR is such a relief, with each individual subject to a lifetime limit of £1m of capital gains. Where spouses jointly own a business, this enables them to utilise the remainder of both of their lifetime limits

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