Business Asset Disposal Relief (BADR) applies to the sale of a business, shares in a trading company, or an individual’s interest in a trading partnership. When this relief is available, a reduced 18% rate (2026-27) of Capital Gains Tax (CGT) applies.
To qualify for BADR, certain conditions must be met:
Sale of a Business or Business Closure:
- You must be a sole trader or business partner; and
- You must have owned the business for at least 2 years leading up to the sale or closure.
- You must dispose of your business assets within 3 years to qualify.
Sale of Shares or Securities:
Both of the following must apply for at least 2 years up to the date you sell your shares:
- You must be an employee or office holder of the company (or a company within the same group).
- The company’s main activities must involve trading, not non-trading activities like investment, or it must be the holding company of a trading group.
Additional rules can apply if the shares are from an Enterprise Management Incentive (EMI).
Currently, you can claim a total of £1 million in BADR over your lifetime, allowing you to qualify for the relief multiple times. The lifetime limit may be higher if you sold assets before 11 March 2020. Investors' Relief CGT rates mirror those for BADR and have also been set at 18% since 6 April 2026.
