Guide
The Business Asset Disposal Relief rate in 2026/27
Updated
The relief rate has moved twice in two years. Getting the wrong one on a seven-figure sale is a six-figure mistake, so start with your completion date.
Talk to a specialist Sale price, relief, Capital Gains Tax and what reaches your account, whether you complete by 5 April 2027 or after.
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How this calculator works
- Business Asset Disposal Relief charges 18% on all gains on qualifying assets disposed of from 6 April 2026. It was 14% between 6 April 2025 and 5 April 2026, and 10% on or before 5 April 2025.
- If your completion date falls in an earlier window, the older rate applies (gov.uk: Business Asset Disposal Relief, and HMRC rates and allowances, updated 13 April 2026).
- The relief is capped across your lifetime, not per disposal: £1,000,000 of gains for a disposal before 6 April 2027. That limit has applied to qualifying disposals on or after 11 March 2020 (gov.uk, HMRC Capital Gains Manual CG64125).
- Budget 2026 cuts it to £500,000 for qualifying disposals made on or after 6 April 2027, at the same 18% rate. Source: HMRC tax information and impact note, 29 October 2026.
- The cut is in the Finance Bill 2026: until Royal Assent it is announced policy, not law. Enter what you have already used.
- Gains above the relief are taxed here at 24%, the higher or additional rate taxpayer's rate. Budget 2026's rates table shows 18% and 24%, and the £3,000 annual exempt amount, unchanged for 2027 to 2028 (Budget 2026, Annex A: rates and allowances).
- A basic rate taxpayer pays 18% on the part of the gain inside their unused basic rate band. So this calculator overstates the tax for someone with little other income (gov.uk: work out your tax).
- The annual exempt amount is £3,000 for 2026/27, unchanged from 2025/26 and 2024/25. As HMRC directs, it is applied to the gains charged at the highest rate first. So it comes off the 24% slice before the 18% slice (HMRC rates and allowances).
- Qualifying for the relief on a share sale broadly requires three things, for at least two years to the date of disposal. You were an officer or employee of the company. It was a trading company or the holding company of a trading group.
- And you held at least 5% of the ordinary shares and voting rights. You were entitled to at least 5% of distributable profits and assets on winding up, or of the proceeds on a sale (gov.uk eligibility, HMRC CG63975, TCGA92/S169I).
- Sole traders and partners qualify on a different two-year test. The toggle takes your word for it; HMRC will not.
- Fees are treated as incidental costs of disposal: they reduce the chargeable gain and the cash you keep. Base cost is what you paid for the shares, which for founders' shares subscribed at par is usually negligible.
- Founders' Relief is computed on the consultation draft, which closes at 11:59pm on 30 November 2026 (HM Treasury technical consultation). The draft charges 10% on qualifying share disposals from 6 April 2027, up to a lifetime limit of £10 million (HMRC tax information and impact note).
- Any Business Asset Disposal Relief or Investors' Relief claimed from 6 April 2027 reduces that limit (Annex A). This calculator assumes none has been claimed, taxes any gain above £10 million at 24%, and applies the relief only when you answer Yes. The conditions can change before the Finance Bill 2026/27 is passed.
- An Employee Ownership Trust sale: from 26 November 2025, 50% of the gain on a qualifying disposal to the trustees is chargeable. The other 50% is held over to the trust. Business Asset Disposal Relief and Investors' Relief are not available on it (HMRC tax information and impact note, helpsheet HS277).
- The chargeable half is taxed here at 24% after the annual exempt amount. The Founders' Relief consultation draft does not say whether that relief can apply to a sale to a trust, so this calculator never applies it there.
- Which date counts. Under a contract the disposal happens when the contract is made, not when the shares are transferred. Under a conditional contract it happens when the condition is satisfied (Taxation of Chargeable Gains Act 1992, section 28).
- Budget 2026 adds anti-forestalling rules for unconditional contracts entered into before 6 April 2027 and completed on or after it. The £500,000 limit applies unless the parties show they did not contract for the timing rule's tax advantage.
- Connected parties must show the contract was wholly commercial. A statement is needed where the gain exceeds £100,000 (HMRC). The calculator's completion date stands for the date of disposal under those rules.
- Not modelled, and each can move the answer materially: earn-outs and deferred consideration, share-for-share exchanges and loan notes, EMI and other option exercises, and capital losses brought forward.
- Nor are Investors' Relief, disposals by trustees or personal representatives, multiple shareholders with different holdings, or anyone not resident in the UK for tax. Take advice before relying on a figure from any calculator, including this one.
BADR tax rates: the rate depends on your date of disposal
| Qualifying assets disposed of | Rate on relieved gains |
|---|---|
| From 6 April 2026 | 18% |
| 6 April 2025 to 5 April 2026 | 14% |
| 30 October 2024 to 5 April 2025 | 10% |
| On or before 29 October 2024 | 10% |
Those are HMRC's own words. The relief means you pay tax at 18% on all gains on qualifying assets disposed of from 6 April 2026. It is 14% on gains disposed of between 6 April 2025 and 5 April 2026, and 10% on or before 5 April 2025 (gov.uk).
HMRC's rates and allowances guidance, last updated 13 April 2026, repeats the same three rates (gov.uk).
The date that counts
It is the date of disposal, not the date the money arrives. For a share sale that is normally the date of the unconditional contract.
So agreements conditional on a consent or regulatory clearance can land in a different tax year from the one assumed at signing. Deferred consideration complicates it again, and is worth an adviser rather than a calculator.
The £1,000,000 lifetime limit
The relief is capped at £1,000,000 of gains across your lifetime, with no limit on how many times you claim within it (gov.uk: how to claim).
HMRC's Capital Gains Manual sets out the history. It was £1m for disposals from 6 April 2008 to 5 April 2010, rising through £2m and £5m to £10m from 6 April 2011. It fell back to £1m for disposals on or after 11 March 2020 (CG64125).
If you sold a business before March 2020 and relieved more than £1m, contact HMRC rather than guessing.
Claiming it
You claim through Self Assessment, or by completing Section A of the Business Asset Disposal Relief helpsheet. HMRC publishes the claim deadlines by tax year:
- 31 January 2028 for a disposal in 2025 to 2026.
- 31 January 2027 for 2024 to 2025.
- 31 January 2026 for 2023 to 2024 (gov.uk).
We publish no 2026 to 2027 deadline because HMRC's table does not yet list one.
Rates move in April. This page states the position on its updated date above, corrected in place when HMRC changes it. Confirm your own date of disposal against gov.uk before you file.