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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%. This relief is available on up to £1m of capital gains for each individual over their lifetime and is available on gains arising to sole traders, partners, shareholders and trusts. The lifetime limit has reduced over several years. Relief applies to all disposals, so BADR should be considered when succession planning involves gifting business ownership, as well as in relatively straightforward sales of a business.

At the Autumn Budget 2024 it was announced that 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.  

The Autumn budget announcements also included general anti-forestalling rules as set out in the Conditions for business asset disposal relief guidance note along with provisions relating to share reorganisations as detailed below.

The general rules for