£250k Gain Selling a Business: £44,460 Tax With BADR

By your other income this tax year

Your income matters for the part of the gain that doesn't qualify and for the comparison without relief, because gains are taxed at 18% only while they fit in your remaining basic rate band.

Other income	Tax with BADR	Without BADR	Saving	You keep
£0	£44,460	£57,018	£12,558	£205,540
£20,000	£44,460	£57,464	£13,004	£205,540
£40,000	£44,460	£58,664	£14,204	£205,540
£60,000	£44,460	£59,280	£14,820	£205,540
£150,000	£44,460	£59,280	£14,820	£205,540

If you've used some of your £1m lifetime limit

BADR already used	Qualifying at 18%	Taxed at normal rates	Total tax
£0	£250,000	£0	£44,460
£250,000	£250,000	£0	£44,460
£500,000	£250,000	£0	£44,460
£750,000	£250,000	£0	£44,460
£1,000,000	£0	£250,000	£59,280

2026/27 disposals; £60,000 of other income in the second table; annual exempt amount £3,000 set against the highest-rate gains first; BADR gains use the basic rate band before other gains (HMRC CG21000). Assumes the conditions for relief are met and no losses or other gains.

Shares or the business itself

Most owner-managed businesses are sold either as a share sale (you sell your shares in the company) or as an asset sale (the company sells its business and you later extract the cash). BADR can apply to a share sale if the company is your personal company and you have been an officer or employee for 2 years; for a sole trader it applies to selling the business itself. How the deal is structured decides which tax you pay and when, so it is worth settling before heads of terms.

On this £250,000 gain, the relief takes the bill from £59,280 to £44,460 for a higher-rate taxpayer.

From April 2027: Budget 2026 cuts the lifetime limit to £500,000 for qualifying disposals on or after 6 April 2027, which would not change this bill: the whole £250,000 still fits under it (if you haven't claimed before). A new Founders’ Relief also starts then: 10% on up to £10 million of gains, which would make it £24,700 - but only for founders of high-growth companies (turnover of £10m or more, 15+ staff and strong growth), and the rules are still being consulted on. Neither change is law yet (Finance Bill 2026-27).

Do you qualify?

For company shares, the company must be your personal company - at least 5% of the ordinary shares and voting rights, plus the profit or proceeds test - and you must be an officer or employee, all for the 2 years before the sale. Sole traders and partners must have owned the business for 2 years; assets can still qualify if they are sold within 3 years of the business stopping. The claim deadline for a 2026/27 sale is 31 January 2029.

Your own proceeds, base cost and income

Business Asset Disposal Relief calculator →

Frequently asked questions

How much tax do I pay selling a business for a £250,000 gain?

With Business Asset Disposal Relief, £44,460 in 2026/27 for a higher-rate taxpayer with no earlier claims - 18% on the gain after the £3,000 annual exempt amount. Without the relief it would be £59,280.

What rate is Business Asset Disposal Relief in 2026/27?

18% for disposals on or after 6 April 2026 (14% in 2025/26, 10% before 6 April 2025), on up to £1 million of qualifying gains over your lifetime - £500,000 for disposals on or after 6 April 2027 under Budget 2026.

Do I qualify?

For company shares: at least 5% of the ordinary shares and voting rights (plus the profit or proceeds test), and being an officer or employee, for the 2 years before the sale. Sole traders and partners: owned the business for 2 years. Assets can qualify within 3 years of the business ceasing.

When must I claim?

By the first anniversary of the 31 January after the tax year of the sale - for a sale in 2026/27, 31 January 2029.

Capital gains tax on a £250,000 gain (no relief)£100,000 gain £500,000 gain £750,000 gain £1,000,000 gain £1,500,000 gain £2,000,000 gain Founders’ Relief (from April 2027)Inheritance tax calculator

Tax on Selling a Business for a £250,000 Gain