Business Asset Disposal Relief Calculator (formerly Entrepreneurs' Relief)

What is Business Asset Disposal Relief?

Business Asset Disposal Relief (BADR) is a Capital Gains Tax relief for individuals who sell all or part of a trading business they've built up. Until 2020 it was called Entrepreneurs' Relief — the Spring Budget 2020 renamed it to BADR and, on the same day (11 March 2020), cut the lifetime cap from £10 million to £1 million. The qualifying tests stayed the same.

Until 5 April 2025 the BADR rate was a flat 10%, which was a huge discount versus higher-rate CGT. The Autumn Budget 2024 announced a two-step increase: 14% from 6 April 2025, then 18% from 6 April 2026. From 2026/27 the BADR rate is aligned with the main CGT lower rate on "other assets", so the headline BADR discount versus the higher-rate 24% is now 6 percentage points rather than 10.

BADR Rate Timeline

• Until 5 April 2025 — 10% flat rate on qualifying gains
• 6 April 2025 to 5 April 2026 — 14% flat rate
• From 6 April 2026 — 18% flat rate
• Lifetime limit — £1,000,000 of qualifying gains (unchanged since 11 March 2020)

Who Qualifies?

BADR is only available to individuals (not companies) and only on genuine trading businesses. To claim, all of the following must be true throughout the 2-year qualifying period ending on the date of disposal:

• You've owned the business, the shares, or the partnership interest for at least 2 years
• The business must be a trading business (or the holding company of a trading group) — investment companies and rental property businesses are excluded
• For share disposals, you must own at least 5% of the ordinary share capital and voting rights — the "personal company" test
• For share disposals, you must have been an officer or employee of the company throughout the 2-year period

If you're a sole trader or partner, you must be disposing of the whole business or a distinct part of it — selling individual assets while the business carries on does not qualify. You can also claim BADR on business assets you sell within 3 years of the business ceasing to trade ("associated disposals" and post-cessation disposals), subject to extra conditions.

What does not qualify: buy-to-let property businesses, investment companies, shares in listed companies where you hold less than 5%, and individual assets sold separately from a continuing business. The former furnished holiday lettings regime, which did qualify for BADR, was abolished from 6 April 2025.

How the £1m Lifetime Limit Works

The £1 million cap is a lifetime allowance, not an annual one. Every qualifying disposal you make uses up part of your lifetime limit, and once it's exhausted there's no further BADR available.

Worked example: suppose you sold a previous company in 2022 and claimed BADR on £700,000 of gain. You've used £700,000 of your lifetime limit, leaving £300,000. In 2026/27 you sell shares in your current company for a £500,000 qualifying gain. The first £300,000 is taxed at the BADR rate of 18% (£54,000), and the remaining £200,000 is taxed at the standard CGT rate for "other assets" — 24% for higher-rate taxpayers — which comes out at £48,000. Total CGT on this disposal: £102,000 on a £500,000 gain.

If you're married or in a civil partnership, each spouse has their own £1m BADR limit, provided each meets the qualifying tests in their own right (ownership, 5% holding, and officer/employee status for share disposals). Transferring shares to a spouse before sale to double up the BADR cap is a common — and legitimate — planning step, but the recipient still has to satisfy the 2-year qualifying period through their own holding.

BADR vs Standard CGT Savings (2026/27)

At the 2026/27 BADR rate of 18%, the saving versus the standard 24% higher-rate CGT is 6 percentage points on every qualifying pound up to the £1m lifetime cap. Here's what that looks like at common deal sizes, assuming a higher-rate taxpayer, annual CGT exemption ignored for simplicity:

The maximum BADR saving in 2026/27 is £60,000 — that is, 6% × £1,000,000 — compared to paying standard 24% CGT on the same £1m qualifying gain. On the £1.5m row, the total bill is £300,000: £180,000 on the BADR-capped £1m plus £120,000 on the £500,000 that spills over into standard CGT.

Claiming BADR

BADR is not automatic — you have to claim it on your Self Assessment tax return for the year of disposal. The deadline is the first anniversary of 31 January following the tax year of disposal — so a disposal in 2026/27 must be claimed by 31 January 2029. You claim on the CGT summary pages (SA108) of your return and should keep evidence that the qualifying conditions were met for the full 2-year period.