If you’re planning to sell your business or shares, there’s an important tax change on the horizon that could significantly impact how much tax you pay.

The rate of Business Asset Disposal Relief (BADR) is set to increase to 18%, meaning higher tax costs for qualifying disposals that previously benefited from a lower rate.

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What is BADR?

Business Asset Disposal Relief (formerly known as Entrepreneurs’ Relief) allows individuals to pay a reduced rate of Capital Gains Tax when selling:

• All or part of a business
• Shares in a personal company
• Assets used in a business

This relief has been a key tax planning tool for business owners looking to exit or restructure.

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What’s Changing?

The BADR tax rate is increasing to 18%, meaning:

• Higher tax on qualifying gains
• Reduced overall tax savings compared to previous rates
• Greater importance on timing your disposal

For example, a gain that previously attracted a lower rate will now be taxed at 18%, increasing your overall tax liability.

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Why This Matters

If you’re considering:

• Selling your business
• Transferring shares
• Exiting a company

…then timing becomes critical.

Delaying a disposal until after the new rate applies could mean paying significantly more tax.

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Should You Act Before the Increase?

You may want to consider accelerating your plans if:

• A sale is already being discussed
• You meet BADR qualifying conditions
• You want to lock in a lower tax rate

However, rushing a transaction without proper planning can lead to:

• Missed relief conditions
• Poor deal structure
• Cash flow or valuation issues

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Key Conditions for BADR

To qualify, you generally must:

• Own at least 5% of shares and voting rights
• Be an officer or employee of the company
• Hold the shares for at least 24 months

Missing any of these conditions could mean losing the relief entirely.

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Planning is Key

With the BADR rate increasing, careful tax planning is more important than ever. A well-timed and properly structured disposal can still lead to significant savings.

At Taxes Done Right Ltd, we help business owners:

• Assess BADR eligibility
• Plan disposals efficiently
• Minimise tax exposure

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Final Thoughts

The increase to 18% may not sound huge, but on large gains it can mean thousands in extra tax.

If you’re even considering a sale or exit, now is the time to review your position and plan ahead.

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Need advice? Get in touch today.