ÑÇÖÞÉ«ÇéÍø

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 14% for disposals made on or after 6 April 2025 (10% prior to this date). The relief is available on up to £1m of capital gains for each individual over their lifetime. The lifetime limit has reduced several times and the previous limits are detailed further below. BADR will increase to 18% for disposals made on or after 6 April 2026, see more details below including anti-forestalling rules which apply from 30 October 2024.

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.