Business Asset Disposal Relief, previously known as Entrepreneurs' Relief, lowers the Capital Gains Tax when you sell all or part of your business or shares in your own trading company. Enter your gain and income to see the tax at the 18% relief rate for 2026/27 (14% for 2025/26), how the £1 million lifetime limit applies and what you save.
Capital Gains Tax with BADR
When you dispose of a business asset that qualifies, Business Asset Disposal Relief (BADR) taxes the gain at a lower Capital Gains Tax rate. The rate depends on the date of the disposal:
| Disposal date | BADR rate |
|---|---|
| From 6 April 2026 | 18% |
| 6 April 2025 to 5 April 2026 | 14% |
| On or before 5 April 2025 | 10% |
You can claim relief on up to £1 million of qualifying gains over your lifetime. It is not an annual limit, and any qualifying gain above what is left of it is taxed at the normal rates. From 6 April 2026 those rates are 18% for gains inside the basic rate band and 24% above it, after a tax-free allowance of £3,000.
From 6 April 2026 the BADR rate is the same as the lower rate of Capital Gains Tax, so the saving comes from gains that would otherwise be taxed at 24%. GOV.UK sets the order: gains that qualify for BADR use up your basic rate band first, what is left of the band goes to your other gains, and the £3,000 tax-free allowance is set against the gains charged at the highest rates.
For a higher rate taxpayer the saving is 6% of the qualifying gain after the allowance: on a £200,000 gain, £35,460 of tax instead of £47,280, a saving of £11,820. A basic rate taxpayer whose gains all fit inside the £37,700 basic rate band saves nothing in 2026/27, because those gains would be taxed at 18% anyway. In 2025/26 the relief rate was 14%, so the relief saved 4% even inside the band.
You claim through your Self Assessment tax return, or with section A of the Business Asset Disposal Relief helpsheet form. The deadline is the first anniversary of the 31 January after the tax year of the disposal: 31 January 2028 for a sale in 2025/26 and 31 January 2029 for a sale in 2026/27. Spouses and civil partners are treated separately, so each can claim up to their own lifetime limit.
For gains that do not qualify, use the Capital Gains Tax calculator or the CGT on shares calculator. To weigh up how to run the business, the limited company vs sole trader calculator compares the two, and the Corporation Tax calculator shows the company's side.
18% on qualifying gains from disposals made on or after 6 April 2026. It was 14% for disposals between 6 April 2025 and 5 April 2026, and 10% for disposals on or before 5 April 2025.
£1 million of qualifying gains over your lifetime. It is not an annual limit, and any qualifying gain above the part of the limit you have left is taxed at the normal Capital Gains Tax rates.
Yes, if any of your gains would otherwise be taxed at 24%. The relief rate now matches the 18% lower rate, so you save 6% on each £1 of qualifying gain that would have fallen into the 24% rate. If all your gains would be taxed at 18% anyway, it saves nothing.
For at least 2 years before the sale you must be an employee or office holder of a trading company that is your personal company: you hold at least 5% of the shares and voting rights and are entitled to at least 5% of the profits and assets or of the sale proceeds. EMI shares have their own rules.
The first anniversary of the 31 January after the end of the tax year of the disposal. For a disposal in 2025/26 that is 31 January 2028, and for 2026/27 it is 31 January 2029.
The annual exempt amount is set against the gains that would be taxed at the highest rates first. It usually goes against your other gains, and any amount left then reduces the gains that qualify for the relief.
