Business Asset Disposal Relief (BADR)
A Capital Gains Tax relief on qualifying business disposals — charged at a flat rate of 10% for 2024/25, 14% for 2025/26, and 18% from April 2026 — up to a £1 million lifetime limit per individual. It applies to sole traders, business partners, and shareholders in personal companies who meet strict ownership and trading conditions (generally a 5% stake held for at least two years). Renamed from Entrepreneurs' Relief in 2020 when the lifetime limit was cut from £10 million to £1 million.
Related Terms
Capital Gains Tax
A tax on the profit (gain) you make when you sell or dispose of an asset that has increased in value, such as shares, investment property, or business assets.
Annual Exempt Amount
The amount of capital gains you can make in a tax year before Capital Gains Tax becomes due, currently £3,000 for individuals.
Investors' Relief
A Capital Gains Tax relief that applies a reduced flat rate on gains from disposing of shares in unlisted trading companies, aimed at encouraging external investors in small businesses.
Entrepreneurs' Relief
The pre-2020 name for what is now called Business Asset Disposal Relief (BADR).
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