UK Business Asset Disposal Relief 2026/27 — 18% Rate, £1M Lifetime Limit

Correction notice (updated 30 July 2026). Earlier versions of this page described Business Asset Disposal Relief as a 10% rate. That rate ended on 5 April 2025. The BADR rate has since risen in two steps and is now 18% — so a £1,000,000 qualifying gain that would have cost £100,000 in tax before 6 April 2025 costs £180,000 today, £80,000 more. The rate is fixed by the date the disposal completed, and a completed disposal cannot be undone. If you sold, or are selling, a business on the strength of a 10% figure, check the date against the table below and speak to your accountant before you file. The £1,000,000 lifetime limit is unchanged.

The rate depends on when the disposal completed

The relevant date is the date of the disposal — normally the date of the unconditional contract, not the date the money arrives. Gains above the lifetime limit are charged at the ordinary CGT rates instead.

What relief is still worth

BADR is now worth 6 percentage points, not 14. Ordinary CGT for a higher- or additional-rate taxpayer is 24%; BADR brings qualifying gains down to 18%. On the full £1,000,000 lifetime limit that is £60,000 of tax saved — real money, but less than half what the same claim was worth in 2024/25.

Worked example — £1.2M gain, no previous BADR claim, higher-rate taxpayer, disposal in 2026/27:

• First £1,000,000 at the BADR rate of 18% → £180,000
• Remaining £200,000, less the £3,000 annual exempt amount, at 24% → £47,280
• Total CGT: £227,280

The identical disposal completed on or before 5 April 2025 would have cost £147,280. Nothing about the business changed; only the date did.

Lifetime limit

The limit is £1,000,000 of qualifying gains per person, for disposals on or after 11 March 2020. It is a lifetime limit, not an annual one — every earlier claim uses part of it permanently, so keep a record of what you have already claimed. Spouses and civil partners each have their own £1,000,000.

Who can claim

You must have met the qualifying conditions throughout the two years ending with the disposal.

• Selling all or part of a business: you are a sole trader or business partner and have owned the business for at least two years. The same applies on closure, and you must dispose of the business assets within three years.
• Selling shares or securities: you are an employee or office holder of the company, and the company is a trading company (or the holding company of a trading group). Unless the shares came from an EMI scheme, it must also be your "personal company" — at least 5% of the ordinary share capital and 5% of the voting rights, plus an entitlement to at least 5% of distributable profits and winding-up assets, or 5% of the proceeds on a sale.
• EMI shares are treated more generously: the 5% personal-company test does not apply, but you must have acquired the shares after 5 April 2013 and have held the option for at least two years before selling.
• Assets you lent to the business can qualify as an "associated disposal", but only alongside a qualifying disposal of at least 5% of your partnership interest or shares.

Letting property is not a business for these purposes. Companies cannot claim.

Claiming

The claim must reach HMRC in writing by the first anniversary of the 31 January following the end of the tax year of disposal — for a 2026/27 disposal, by 31 January 2029. Most people claim on the tax return. A claim can be amended or revoked inside the same window.

Common mistakes to avoid

✘ Using a rate you read before the Budget — 10% applied to disposals on or before 5 April 2025 only. Check the completion date against the table above. ✘ Assuming the lifetime limit resets — it does not. Gains above £1,000,000 across your whole life are taxed at ordinary CGT rates. ✘ Missing the two-year qualifying period — selling a month early loses the entire relief, not part of it. ✘ Forgetting the claim deadline — the relief is not automatic, and the deadline is nearly two years after the disposal but it is real.

Conclusion

Business Asset Disposal Relief still reduces the CGT on up to £1,000,000 of qualifying gains, but at 18% rather than the 10% that applied before 6 April 2025. Because the rate is set by the disposal date and a completed sale cannot be reversed, confirm the rate for your actual completion date — and take professional advice before contracting, not after.

Figures verified against GOV.UK (Business Asset Disposal Relief; Capital Gains Tax rates and allowances) and HMRC helpsheet HS275, July 2026.