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Capital Gains Tax Experts
UK BADR and Entrepreneurs Relief Specialists

Business Asset Disposal Relief (BADR) — Pay Just 18% CGT on Your Business Sale

Expert BADR and Entrepreneurs Relief advice for UK business owners. We verify your eligibility, apply your 18% BADR rate, and ensure you pay the minimum CGT on your business disposal.

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HMRC Compliant
ACCA
2026/27 Tax Rates
Manchester and Nationwide
Business Exit Specialists
Understanding BADR

What Is Business Asset Disposal Relief (BADR)?

Business Asset Disposal Relief (BADR) — formerly known as Entrepreneurs Relief — is a CGT relief that reduces the tax rate on gains from qualifying business disposals to just 18%. This applies to the first 1,000,000 GBP of qualifying gains in your lifetime, potentially saving you up to 60,000 GBP compared to the standard higher rate of 24%.

BADR is available when you sell all or part of your business, close a business, sell shares in your personal company, or dispose of assets after ceasing to trade. The relief has strict qualifying conditions that must be met for at least 2 years before the disposal.

Our Manchester-based BADR specialists review your eligibility, identify any issues that could disqualify your claim, and advise on restructuring where needed. We have helped hundreds of business owners successfully claim BADR and save significant CGT on their business exit.

BADR Key Facts (2026/27)

BADR CGT Rate18%
Standard Higher Rate24%
Lifetime Allowance1,000,000 GBP
Maximum Tax Saving60,000 GBP
Minimum Ownership Period2 Years
Min Share Ownership5%
Company Type RequiredTrading Company
Our BADR Services

Everything You Need to Claim BADR Successfully

BADR Eligibility Assessment

We review all BADR qualifying conditions — share ownership, voting rights, employment status, and company trading status — to confirm your eligibility before disposal.

Pre-Sale Restructuring

If your business doesn't yet qualify, we advise on restructuring to meet BADR conditions — ensuring you qualify before proceeding with your sale.

CGT Calculation with BADR

We calculate your total CGT liability with BADR applied, model the tax saving, and confirm how much of your lifetime allowance you will use.

BADR Claim Filing

We prepare and file your BADR election on your self-assessment return, ensuring the claim is correctly documented and submitted to HMRC on time.

Investors Relief Advice

In addition to BADR, qualifying external investors can claim Investors Relief — a separate 18% rate on up to 10,000,000 GBP of gains in unlisted trading companies.

HMRC Enquiry Defence

If HMRC investigates your BADR claim, our specialists provide expert defence — ensuring your claim withstands scrutiny with proper documentation.

BADR Qualifying Conditions

Do You Qualify for Business Asset Disposal Relief?

Company Share Disposal Requirements

  • Own at least 5% of ordinary shares and voting rights
  • Be an employee or officer of the company
  • Company must be a trading company (not investment)
  • Must have met conditions for at least 2 years before disposal
  • Company entitled to at least 5% of distributable profits
  • Entitled to at least 5% of net assets on winding up
  • No 2-year gap in qualifying conditions
  • Lifetime limit of 1,000,000 GBP in qualifying gains

Sole Trader or Partnership Requirements

  • Trading business owned for at least 2 years
  • Disposal of all or part of a qualifying business
  • Business must have been actively trading (not investment)
  • Assets used in the business for the 2-year period
  • Disposing of assets on cessation within 3 years
  • Associated disposals require personal company shareholding
  • No material change to trading activities
  • Full BADR lifetime limit applies
Our Process

How We Handle Your BADR Claim

1

Eligibility Review

We check all BADR qualifying conditions — ownership, employment, trading status, and 2-year requirements.

2

CGT Modelling

We calculate your CGT with and without BADR, confirm lifetime allowance remaining, and quantify the tax saving.

3

Transaction Advice

We advise on deal structure to ensure BADR conditions are maintained through the sale process.

4

HMRC Filing

We file your BADR election on your self-assessment return and handle any HMRC correspondence.

Frequently Asked Questions

BADR Questions Answered

What is the BADR lifetime allowance in 2026/27?
The BADR lifetime allowance is 1,000,000 GBP of qualifying gains per individual. This means you can make gains of up to 1,000,000 GBP from qualifying business disposals across your lifetime and pay CGT at just 18% on those gains — the same as the basic rate, rather than the 24% higher rate that applies once your income and gains exceed the higher-rate threshold. Once you use your full 1,000,000 GBP lifetime allowance, any additional gains from business disposals are taxed at the normal rate for your income tax band (18% or 24%).
How do I qualify for BADR on a company share sale?
To qualify for BADR when selling company shares, you must: (1) hold at least 5% of the ordinary share capital and 5% of the voting rights; (2) be an employee or office holder of the company; (3) hold the shares for at least 2 years before sale; and (4) the company must be a trading company or holding company of a trading group. Our specialists check all conditions and advise on any issues before you proceed.
What happened to Entrepreneurs Relief?
Entrepreneurs Relief was renamed Business Asset Disposal Relief in April 2020. The key change was the reduction of the lifetime allowance from 10,000,000 GBP to 1,000,000 GBP. The qualifying conditions remained similar. BADR continues to allow business owners to pay CGT at just 18% on qualifying gains up to their lifetime limit — the same as the basic rate, rather than the 24% higher rate. If you claimed some Entrepreneurs Relief before April 2020, this reduces your remaining BADR lifetime allowance.
Can I still claim BADR if I only own 5% of shares?
Yes, as long as the 5% test is met for both ordinary shares and voting rights for at least 2 years. There are anti-dilution provisions that can protect your BADR eligibility if your shareholding drops below 5% due to a new share issue, provided you held at least 5% at the time of the new issue and make an election. Our specialists advise on these complex situations.
How does BADR interact with earn-out payments?
Earn-out payments (deferred consideration) are generally treated as separate disposals in the year they crystallise. This can cause complexity — BADR eligibility is determined at the time of the original disposal, but earn-outs may arise after you have ceased to be an employee or hold shares. Careful structuring of the earn-out as an unascertainable right at the time of sale may help preserve BADR on all payments. We advise on earn-out structuring specifically for BADR.

Maximise Your BADR Claim on Your Business Sale

Manchester's leading BADR and Entrepreneurs Relief specialists. Start with a free consultation today.

GET FREE CONSULTATION +44 (0)1204 859315
Tax Disclaimer: The information on this page is for general guidance only and does not constitute personalised tax advice. BADR rates, conditions, and lifetime limits are based on 2026/27 HMRC guidelines and are subject to change. Always seek qualified professional advice before proceeding with any business disposal. Capital Gains Tax Expert is a UK-registered tax advisory firm.
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