Business Asset Disposal Relief (BADR): Don’t Pay More Tax Than You Need To
If you’re planning to sell your business or shares, Business Asset Disposal Relief (BADR) can reduce your tax bill—but recent changes mean timing is critical.
What’s changed?
BADR rates are increasing:
- 14% for disposals on/after 6 April 2025 (2025/26)
- 18% for disposals on/after 6 April 2026 (2026/27 onwards)
Delay your sale, and you could pay more tax.
Do you qualify?
You must meet key conditions for at least 2 years, including:
- Being an employee or director
- Holding at least 5% of shares and voting rights
- The company being a trading business
Miss one of these—even briefly—and the relief can be lost.
Common mistake
Making changes before a sale (like gifting shares) can drop you below 5% and invalidate BADR completely.
Key takeaway
BADR is still valuable—but it’s getting less generous and easier to lose.
