Business Asset Disposal Relief is a Capital Gains Tax (“CGT”) relief that may mean you pay a lower rate of CGT on the sale of all or part of your business, your personal service company or shares in a company that you work in.
It is the relief that was known as Entrepreneurs’ relief until April 2020.
If you meet the eligibility criteria for at least 2 years prior to the date of sale, the first £1million of gains could be taxed at 14% (rather than 24%) from April 2025 …. So a saving of £100,000. The lower rate of tax will increase to 18% from April 2026. This will still represent a £60,000 saving.
The Criteria
The actual criteria applicable depends on the type of business you are selling but broadly, it must be a trading business (not investment) that you have owned and worked in for at least 2 years up to the date of sale.
The same can apply if you’re closing your business instead, providing you dispose of all of your business assets within 3 years of ceasing to trade.
We've got you!
If you think you have made a recent sale or other transaction that may qualify for Business Asset Disposal Relief or you are unsure of how to make the most of this relief get in touch to start your journey with us.