Business asset disposal relief for partnerships

Produced by a Tolley Owner-Managed Businesses expert

Owner-Managed Businesses

Guidance

This guidance note discusses the application of business asset disposal relief (BADR) for partners only. BADR is a capital gains tax relief which reduces the rate of tax on qualifying gains to 10%.

BADR relief is available for individuals whether they operate as a sole trader, in partnership or through their personal company. Companies cannot claim BADR. There is a lifetime limit on BADR of £1m of total capital gains.

The rules for sole traders are the same as those for partners and there is more detail in the Conditions for business asset disposal relief guidance note. The commentary below sets out how these rules apply to partners in partnerships.

For further guidance on BADR and partnerships, see Simon’s Taxes C3.1302C–C3.1303A and HMRC guidance in CG63950P onwards.

Overview of business asset disposal relief for partnerships

To be eligible for BADR, a disposal must be one of the three main categories as follows:

•
a material

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