{"id":14215,"date":"2025-03-21T18:54:27","date_gmt":"2025-03-21T16:54:27","guid":{"rendered":"https:\/\/kairos-k.uk\/?p=14215"},"modified":"2025-03-21T22:52:00","modified_gmt":"2025-03-21T20:52:00","slug":"business-asset-disposal-relief-in-the-uk","status":"publish","type":"post","link":"https:\/\/kairos-k.uk\/en\/business-asset-disposal-relief-in-the-uk\/","title":{"rendered":"Business Asset Disposal Relief in the UK"},"content":{"rendered":"\t\t
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Wondering what Business Asset Disposal Relief (BADR) is and how it works? Simply put, it’s a UK tax relief that helps certain business owners pay less Capital Gains Tax (CGT)<\/a> when they sell or ‘dispose of’ their business assets.<\/p>\n

If you’ve spent years building a company, it often means you’ll only pay 10% (14% from 6 April 2025) Capital Gains Tax on the profit when you sell your business \u2013 instead of the usual higher CGT rate. Essentially, it’s the government’s way of rewarding entrepreneurs and encouraging long-term investment in the UK economy.<\/p>\n\n<\/div>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The Rebirth of Entrepreneurs' Relief as BADR<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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BADR is just Entrepreneurs’ Relief in a fancy new suit. The government announced this rebranded tax relief in the 2020 Budget, with the switch flipping on 11 March 2020.<\/span><\/p>

So why the makeover? The old relief had gone seriously off the rails. Instead of helping plucky start-ups, it had become a tax haven for the wealthy elite. Private equity moguls, clever property developers and established professional firms were gaming the system. These weren’t risk-taking entrepreneurs, but sophisticated players with expensive tax advisers.<\/span><\/p>

The numbers tell the story – a whopping 75% of the benefits went to just 5,000 business owners, with average claims of \u00a32 million. The relief had become a tax loophole for the rich rather than a boost for real entrepreneurship.<\/span><\/p>

The government’s response? Slashed the lifetime allowance from a generous \u00a310 million to a more modest \u00a31 million and rebranded the whole thing as Business Asset Disposal Relief – distancing itself from what had become an embarrassingly misguided tax giveaway.<\/span><\/p>

Despite the reduced limit, Business Asset Disposal Relief still follows many of the same rules – so if you hear people talking about Entrepreneurs’ Relief, just remember that BADR has replaced it but kept most of the mechanics.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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What Is Business Asset Disposal Relief?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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What Is Business Asset Disposal Relief?<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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So, Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs’ Relief, is a valuable tax relief in the UK that allows <\/span>eligible individuals<\/b> to pay a reduced rate of Capital Gains Tax (CGT) when disposing of <\/span>qualifying business assets<\/b><\/p>

BADR slashes your Capital Gains Tax to a flat 10% (14% from 6 April 2025) <\/b>instead of the usual CGT on business disposals. This sweet deal applies <\/span>no matter which tax bracket you fall into<\/b> – basic, higher, or additional rate.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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The million pound cap<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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There’s a lifetime limit of \u00a31 million on the gains that qualify for this tax break. You can claim BADR several times until you reach this limit. But once you exceed the \u00a31 million threshold, any additional qualifying gains will be taxed at standard CGT rates.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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BARD rate changes 2025 and 2026\n<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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Right now, qualifying disposals are charged at 10% if you make the gain before April 2025,<\/span> 14%<\/b> if the gain falls between April 2025 and April 2026 (from 6 April 2025), and <\/span>18%<\/b> from April 2026 onwards. There was no change to the \u00a31 million lifetime limit.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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Don't Miss the Deadline<\/h3>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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You must claim your BADR on or before the first anniversary of 31 January following the tax year of your disposal. If you miss this window, you’ll have to pay the full rate of tax.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t

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When Does Business Asset Disposal Relief Apply?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t
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If you meet all the qualifying conditions, <\/span>when does Business Asset Disposal Relief apply<\/b> to your sale or disposal? In most cases, it applies to:<\/span><\/p>