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Business asset disposal relief (which may also be referred to as BADR) is a capital gains tax (CGT) relief available to taxpayers who make a qualifying business disposal (essentially selling or giving away their business). Gains qualifying for business asset disposal relief are taxed at a flat rate. Relief is available on up to £1m of capital gains for each individual over their lifetime.

For disposals between 23 June 2010 and 5 April 2025, qualifying gains are taxed at a flat rate of 10%. Disposals made between 6 April 2025 and 5 April 2026 are taxed at 14% and disposals made on or after 6 April 2026 are taxed at 18%. These rate changes are subject to anti-forestalling provisions. See ‘Rate of CGT on qualifying gains’ below.

Prior to 6 April 2020, business asset disposal relief was known as entrepreneurs’ relief. Strictly, any reference to the relief before 6 April 2020 in the commentary below should use the term entrepreneurs’ relief, however to avoid confusion, the term business asset disposal relief