Business Asset Disposal Relief – tax increase from April 2026

by Aitch, posted in Capital Gains Tax

The tax rate for Business Asset Disposal Relief (BADR) will increase to 18% (from 14%) on 6 April 2026. BADR offers a reduced Capital Gains Tax (CGT) rate on qualifying disposals such as the sale of a business, shares in a trading company or an individual’s stake in a trading partnership.

These rate increases are accompanied by new anti-forestalling rules designed to prevent individuals from securing the lower BADR rate by using early contracts. Where an unconditional contract is entered into during the 2025-26 tax year but completes on or after 6 April 2026, the disposal will normally be treated as occurring at completion, meaning the higher 18% rate applies. 

However, the legislation allows for “excluded contracts” where the contract was not entered into to secure a tax advantage and, where parties are connected, was entered into wholly for commercial reasons. Where total gains under excluded contracts do not exceed £100,000, the anti-forestalling does not apply.

The lifetime BADR limit remains £1 million meaning individuals can use the relief multiple times, provided their total gains from qualifying disposals do not exceed this threshold. However, the higher CGT rates obviously reduce the tax advantage available. Investors’ Relief CGT rates are currently in line with those for BADR and will also increase to 18% in April 2026.

Source:HM Revenue & Customs | 30-03-2026
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Aitch
I'm Aitch, the Founder and CEO of CIGMA Accounting Ltd. As a Chartered Management Accountant and as a CIMA member, I've spent more than 16 years helping businesses, entrepreneurs, landlords, and individuals with tax planning, accounting, and HMRC compliance. As a chartered accountant in London, I'm passionate about making complex tax matters easier to understand and helping clients make confident financial decisions. Over the years, I've advised start-ups, SMEs, established companies, and high-net-worth individuals across a wide range of tax and accounting matters. My expertise includes Corporation Tax, Self-Assessment, Capital Gains Tax, Inheritance Tax planning, R&D tax relief, capital allowances, international tax, and resolving complex HMRC compliance issues. Whether clients need a business accountant, tax accountant, or strategic tax advisor, my focus is always on delivering practical advice that creates long-term value. One of my specialist areas is Making Tax Digital (MTD). I've worked extensively with businesses preparing HMRC's digital reporting requirements, helping them move to cloud accounting, improve financial processes, and adopt technology that makes compliance more efficient. I regularly speak at Making Tax Digital roadshows, industry events, and educational sessions in collaboration with Zoho Books, sharing practical insights into digital accounting, tax legislation, and the future of the profession. Many business owners looking for the best accounting firm in London are not simply searching for an accountant they're looking for trusted advice, responsive support, and long-term value. That's the approach I've taken in building CIGMA Accounting. My team and I work closely with businesses across London and the UK, providing accounting services, tax advisory, bookkeeping, payroll, VAT, company accounts, and strategic tax planning tailored to each client's goals. Through this website, I share practical guidance on UK taxation, Making Tax Digital, HMRC updates, Corporation Tax, Self-Assessment, and business finance. My aim is to provide reliable, straightforward information that helps business owners understand changing regulations, reduce compliance risks, and make informed financial decisions with confidence.
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