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Business asset disposal relief (BADR), which was previously known as entrepreneurs’ relief, 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%. For disposals made on or after 11 March 2020, the relief is available on up to £1m of capital gains for each individual over their lifetime; prior to 11 March 2020, the lifetime limit was £10m. This reduction in the lifetime limit was in FA 2020 and is detailed further below.

Relief is available on gains arising to sole traders, partners, shareholders and trusts; it is not available for companies. The relief also applies to gifts and non-arm’s-length sales.

This guidance note sets out the main qualifying conditions for BADR, how the relief is calculated and claimed, and details on associated disposals.

HMRC guidance is set out at CG63950P and the relevant legislation can be found in TCGA 1992, ss 169H–169SH.