While there have been no specific announcements regarding changes to Business Asset Disposal Relief (BADR), the Chancellor may consider modifying this relief in the upcoming Budget. If you are contemplating selling your business soon, we can assist you in evaluating your options.
BADR currently applies to the sale of a business, shares in a trading company, or an individual's interest in a trading partnership. When this relief is available, a Capital Gains Tax (CGT) rate of 10% applies instead of the standard rate, potentially resulting in significant CGT savings for those looking to exit their business.
To qualify for this relief, several conditions must be met. Currently, individuals can claim a total of £1 million in BADR over their lifetime. This £1 million lifetime limit allows for multiple claims for the relief. Additionally, the lifetime limit may be increased if assets were sold before 11 March 2020.
