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You may be able to pay less Capital Gains Tax when you sell (or ‘dispose of’) all or part of your business.

Business Asset Disposal Relief means you’ll pay tax at either:

• 18% on all gains on qualifying assets disposed of from 6 April 2026
• 14% on all gains on qualifying assets disposed of between 6 April 2025 and 5 April 2026
• 10% on all gains on qualifying assets disposed of on or before 5 April 2025

If you’re selling all or part of your business

To qualify for relief, both of the following must apply for at least 2 years up to the date you sell your business:

• you’re a sole trader or business partner
• you’ve owned the business for at least 2 years

If you’re selling shares or securities

To qualify, both of the following must apply for at least 2 years up to the date you sell your shares:

• you’re an employee or office holder of the company (or one in the same group)
• the company’s main activities are in trading (rather than non-trading activities like investment) - or it’s the holding company of a trading group

There are also other rules depending on whether or not the shares are from an Enterprise Management Incentive (EMI).

If the shares are from an EMI

You must have both:

• bought the shares after 5 April 2013
• been given the option to buy them at least 2 years before selling them

If the shares are not from an EMI

For at least 2 years before you sell your shares, the business must be a ‘personal company’. This means that you have at least 5% of both the:

• shares
• voting rights

You must also be entitled to at least 5% of either:

• profits that are available for distribution and assets on winding up the company
• disposal proceeds if the company is sold 

If the number of shares you hold falls below 5% because the company has issued more shares, you may still be able to claim Business Asset Disposal Relief.

You need to choose or ‘elect’ to be treated as if you had sold and re-bought your shares immediately before the new shares were issued. This will create a gain on which you can claim Business Asset Disposal Relief.

You can also choose or ‘elect’ to postpone paying tax on that gain until you come to sell your shares.

You can do this by:

• completing the additional information section of the Capital Gains summary form of your tax return
• writing to HMRC if you do not have to complete a tax return for the year

If the company stops being a trading company

If the company stops being a trading company, you can still qualify for relief if you sell your shares within 3 years.

If you’re selling assets you lent to the business

To qualify, both of the following must apply:

• you’ve sold at least 5% of your part of a business partnership or your shares in a personal company
• you owned the assets but let your business partnership or personal company use them for at least one year up to the date you sold your business or shares - or the date the business closed

If you’re a trustee

You may also qualify if you’re a trustee selling assets held in the trust.

How you work out your tax depends on whether all your gains are eligible for Business Asset Disposal Relief.

If all your gains qualify for Business Asset Disposal Relief

1. Work out the gain for all qualifying assets.

2. Add together the gains (and deduct qualifying losses) to work out the total taxable gain that’s eligible for Business Asset Disposal Relief.

3. Deduct your tax-free allowance.

4. You’ll pay 18% tax on what’s left, 14% if you disposed of the asset between 6 April 2025 and 5 April 2026, or 10% if you disposed of the asset before 6 April 2025.

If you have other gains

How much tax you pay on your other gains depends on what Income Tax rate you pay.

Higher rate and additional rate Income Tax payers

If you’re a higher or additional rate taxpayer, you’ll pay 24% for gains that do not qualify for Business Asset Disposal Relief. You can use your tax-free allowance against the gains that are charged at 24%. You can use any remaining allowance against gains that do qualify for Business Asset Disposal Relief.

Basic rate Income Tax payers

If you’re a basic rate taxpayer, you need to work out the tax rate you’ll pay on gains that are not eligible for Business Asset Disposal Relief.

1. Work out how much taxable income you have. Deduct your Personal Allowance and any other Income Tax reliefs you’re entitled to.

2. Deduct this amount from the basic rate tax band for the year you made the gains. This gives you the amount of basic rate band you can use against your gains.

3. Work out your total taxable gain.

4. Use your basic rate band first against any gains eligible for Business Asset Disposal Relief.

5. Use any remaining basic rate band against your other gains. You’ll pay 18% on gains made from 30 October 2024.

6. For gains above the basic rate band, you’ll pay 24% on gains made from 30 October 2024.

7. You can use your tax-free allowance against the gains that would be charged at the highest rates (for example where you would pay 24% tax).

Disposals between 6 April 2024 to 29 October 2024

At the basic rate you’ll pay 18% on gains made on residential property and 10% on gains from all other chargeable assets. Above the basic rate, you’ll pay 24% on gains from residential property and 20% on gains from other chargeable assets.

Disposals between 6 April 2019 to 5 April 2024

At the basic rate you’ll pay 18% on gains made on residential property and 10% on gains from all other chargeable assets. Above the basic rate, you’ll pay 28% on gains from residential property and 20% on gains made from other chargeable assets.

Get help

Contact HM Revenue and Customs (HMRC) or get professional tax help if you need advice.

You can claim Business Asset Disposal Relief either:

• through your Self Assessment tax return
• by filling in Section A of the Business Asset Disposal Relief helpsheet

You can claim a total of £1 million in Business Asset Disposal Relief over your lifetime.

You may be able to claim more if you sold your assets before 11 March 2020. Contact HMRC to find out.

Deadline

Tax year when you sold or closed your business	Deadline to claim Business Asset Disposal Relief
2025 to 2026	31 January 2028
2024 to 2025	31 January 2027
2023 to 2024	31 January 2026