Guide
Capital Gains Tax when you sell a business (2026/27)
Updated
Three numbers decide the bill: your gain, whether the relief applies, and how much of the £1,000,000 lifetime limit you have left. Everything else is detail.
Talk to a specialist Sale price, relief, Capital Gains Tax and what reaches your account, whether you complete by 5 April 2027 or after.
Email me this result
We will send you these figures and a link back to them. One email, nothing else unless you tick the box.
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.
Working out the gain
- Start with the consideration for your shares or your share of the business.
- Deduct the base cost: what you originally paid for them.
- Deduct incidental costs of disposal, including broker, legal and accountancy fees on the sale.
- Deduct any allowable capital losses, including losses brought forward from earlier years.
- Deduct the annual exempt amount, £3,000 for 2026/27, against the gains charged at the highest rate first.
The rates that apply to what is left
- 18%
- Gains qualifying for Business Asset Disposal Relief or Investors' Relief, disposed of from 6 April 2026. Also the rate a basic rate taxpayer pays on other gains inside their unused basic rate band.
- 24%
- Other gains for a higher or additional rate taxpayer from 6 April 2026, including anything above the £1,000,000 relief limit.
- £3,000
- The annual exempt amount for individuals for 2026 to 2027, the same as 2025 to 2026 and 2024 to 2025. HMRC's published table is the place to check it each April.
All three figures are HMRC's, from the rates and allowances guidance last updated 13 April 2026 (gov.uk) and the relief guide itself (gov.uk).
Reporting and paying
A business or share sale is not UK residential property, so the 60-day property rules do not apply. You report it in the tax year after the disposal through Self Assessment.
If eligible, you may instead use HMRC's real time Capital Gains Tax service, reporting by 31 December in the tax year after the sale (gov.uk). Put the tax aside on completion day; the bill arrives long after the money does.
Where the calculator will be wrong for you
- Earn-outs. The right to future consideration is itself an asset with its own tax treatment, and it is a common source of paying tax on money that never arrives.
- Loan notes and share-for-share deals. These can defer the gain rather than trigger it, sometimes at the cost of the relief.
- Option exercises. EMI and unapproved options interact with the two-year and 5% tests in ways a toggle cannot capture.
- More than one seller. Each shareholder has their own base cost, their own lifetime limit and their own income position.
- Losses and other gains in the same year. The order in which allowances and losses are set against different rate bands changes the total.
None of this is tax advice. It is a sourced starting point so that the conversation with your accountant begins somewhere near the right number.