| Gain | Tax with BADR | Without BADR | Saving | You keep |
|---|---|---|---|---|
| £100,000 | £17,460 | £23,280 | £5,820 | £82,540 |
| £250,000 | £44,460 | £59,280 | £14,820 | £205,540 |
| £500,000 | £89,460 | £119,280 | £29,820 | £410,540 |
| £750,000 | £134,460 | £179,280 | £44,820 | £615,540 |
| £1,000,000 | £179,460 | £239,280 | £59,820 | £820,540 |
| £1,500,000 | £299,280 | £359,280 | £60,000 | £1,200,720 |
| £2,000,000 | £419,280 | £479,280 | £60,000 | £1,580,720 |
Higher-rate taxpayer (£60,000 of other income), 2026/27 disposals, no earlier BADR claims, conditions for relief met.
How the relief works
Business Asset Disposal Relief taxes qualifying gains at 18% for disposals on or after 6 April 2026 (14% in 2025/26, 10% before 6 April 2025) on up to £1 million of gains over your lifetime. Without it, gains are taxed at 18% only within your remaining basic rate band and at 24% above - so for most sellers the relief turns 24% into 18%, worth up to £60,000.
The £3,000 annual exempt amount comes off the gains taxed at the highest rate first, and gains that qualify for BADR use any basic rate band you have left before other gains do. The conditions - 5% of shares and votes and being an officer or employee for 2 years for company shares, or 2 years' ownership for a sole trader or partner - are set out on each page.
Budget 2026: what changes from 6 April 2027
Budget 2026 cuts the BADR lifetime limit to £500,000 for qualifying disposals on or after 6 April 2027, and adds Founders’ Relief: 10% on up to £10 million of gains on shares, for founders who held 25% from the start of a company with £10m+ turnover and 15+ staff (HMRC expects about 600 eligible people a year). Higher-rate taxpayer, no earlier claims:
| Gain | BADR by 5 Apr 2027 | BADR from 6 Apr 2027 | Founders’ Relief, if eligible |
|---|---|---|---|
| £100,000 | £17,460 | £17,460 | £9,700 |
| £250,000 | £44,460 | £44,460 | £24,700 |
| £500,000 | £89,460 | £89,460 | £49,700 |
| £750,000 | £134,460 | £149,280 | £74,700 |
| £1,000,000 | £179,460 | £209,280 | £99,700 |
| £1,500,000 | £299,280 | £329,280 | £149,700 |
| £2,000,000 | £419,280 | £449,280 | £199,700 |
Proposals in Finance Bill 2026-27, not yet law; the Founders’ Relief rules are under consultation until 30 November 2026.
Your own proceeds, base cost and income
Business Asset Disposal Relief calculator →Frequently asked questions
How is selling a business taxed in 2026/27?
The gain is subject to Capital Gains Tax. If the sale qualifies for Business Asset Disposal Relief, gains up to your £1m lifetime limit are taxed at 18%; anything above is taxed at the normal 18% and 24% rates, after the £3,000 annual exempt amount.
Is it still called Entrepreneurs' Relief?
It was renamed Business Asset Disposal Relief in 2020, when the lifetime limit was cut from £10m to £1m for disposals on or after 11 March 2020.
When is the claim deadline?
The first anniversary of the 31 January after the tax year of the sale: 31 January 2029 for a sale in 2026/27.
What changes for business sales from April 2027?
Budget 2026 cuts the BADR lifetime limit to £500,000 for qualifying disposals on or after 6 April 2027, and introduces Founders' Relief: 10% on up to £10 million of gains on shares, for founders of high-growth companies who meet strict conditions. Both are to be legislated in Finance Bill 2026-27.
Related
Sources
- Business Asset Disposal Relief
- HS275 Business Asset Disposal Relief (2026): rates, lifetime limit, conditions, annual exempt amount, claim deadline
- HMRC Capital Gains Manual CG21000: BADR gains use the basic rate band first
- Capital Gains Tax rates and allowances
- Capital Gains Tax: annual tax-free allowance
- Budget 2026 overview of tax legislation and rates, 1.32-1.33 (Founders' Relief; BADR lifetime limit to £500,000 from 6 April 2027)
- Budget 2026 Annex A: rates and allowances