In the Autumn 2026 Budget last week, it was announced that there would be changes to Business Asset Disposal Relief (BADR).
If you weren’t already aware, BADR reduces the rate of Capital Gains Tax payable on qualifying business disposals. BADR is currently subject to a lifetime limit of £1 million of qualifying gains. Such qualifying gains are then currently taxed at 18%. The change in last week’s Budget, is that the lifetime limit will be reduced from £1million to £500,000. This significant change will be brought into effect, for any qualifying disposals made on or after the 6 April 2027.
This change will potentially have a huge impact on the amount of tax a seller will pay on any such disposal. In this regard, we would strongly recommend anybody who is potentially looking at selling/disposing of their interests in a business to seek legal and tax advice as to how this could potentially impact them and further look to consider their options and position with any such disposals.
If anyone is looking to complete a transaction before the April 2027 deadline and would like us to assist with such, we would urge them to get in contact with us to instruct us accordingly, by no later than mid-January 2027 in order to meet an end of March completion date (before the BADR change “kicks-in”).
Head of our Corporate Law team, Charlotte Stojak, says, “We anticipate that we will be extremely busy with such transactions in the New Year and therefore we would recommend getting in contact sooner rather than later in this regard.”
For further information, please contact the Corporate team at [email protected].
