Entrepreneurs’ Relief Guide
Now known as Business Asset Disposal Relief (BADR). Understand the rules, check your eligibility, and learn how to claim the 10% Capital Gains Tax rate in the UK.
Check Your Eligibility
Answer a few quick questions about your business ownership and role to get an initial assessment of your eligibility for Business Asset Disposal Relief.
Eligibility Checklist
Assess your BADR qualification status
Eligibility Assessment
Based on your provided information
What is Business Asset Disposal Relief (BADR)?
Formerly known as Entrepreneurs’ Relief, Business Asset Disposal Relief (BADR) is a UK tax relief that reduces the rate of Capital Gains Tax (CGT) to 10% on the disposal of qualifying business assets. This is significantly lower than the standard CGT rates of 10% or 20% (and up to 28% for residential property).
The relief is designed to reward individuals who have built and grown a business over a sustained period, making it easier to retire, move on to new ventures, or pass the business on.
Key Eligibility Criteria
To qualify for BADR, you must meet specific conditions depending on your business structure:
- Sole Traders & Partners: You must have owned the business (or your share of it) for at least 2 years before the date of disposal. You must also be selling all or part of the business as a going concern.
- Company Shareholders: The company must be your “personal company.” This means you must hold at least 5% of the ordinary share capital and have at least 5% of the voting rights. Additionally, you must be an officer (e.g., director) or employee of the company for at least 2 years prior to disposal.
- Lifetime Limit: The relief is capped at £1 million of qualifying gains over your entire lifetime. Once you have claimed relief on £1 million of gains, any further disposals will be taxed at the standard CGT rates.
How and When to Claim
You cannot claim BADR automatically; you must actively claim it. The claim must be made by the first anniversary of the 31st of January following the tax year in which the disposal occurred. For example, if you sold your business in the 2023/24 tax year, the deadline to claim BADR is 31st January 2026.
Claims are made through your Self Assessment tax return using the dedicated BADR supplementary pages (HS275). It is highly recommended to consult a qualified tax advisor to ensure your claim is structured correctly and submitted on time.
BADR Key Facts & Deadlines
Essential thresholds, rates, and deadlines for Business Asset Disposal Relief in the UK.
| Parameter | Detail | Impact |
|---|---|---|
| Relief Name | Business Asset Disposal Relief (BADR) | Replaced “Entrepreneurs’ Relief” in 2020. |
| CGT Rate with Relief | 10% | Significantly lower than standard 10%/20% rates. |
| Lifetime Limit | £1,000,000 | Maximum qualifying gains over your lifetime. |
| Minimum Ownership | 2 Years | Must be continuous up to the date of disposal. |
| Minimum Shareholding | 5% | Applies to ordinary shares and voting rights (companies). |
| Claim Deadline | 1st Anniversary of 31st Jan | Following the end of the tax year of disposal. |
BADR FAQ
Everything you need to know about claiming Business Asset Disposal Relief in the UK.
Entrepreneurs’ Relief was officially renamed to Business Asset Disposal Relief (BADR) in the UK Spring Budget of 2020. The core rules and benefits remain largely the same, though the lifetime limit was reduced to £1 million at that time.
The lifetime limit for BADR is £1 million. This means you can benefit from the 10% Capital Gains Tax rate on up to £1 million of qualifying gains over your entire lifetime. Any gains beyond this limit are taxed at the standard CGT rates.
You must have owned the business (or held qualifying shares in a personal company) for at least 2 years leading up to the date of disposal. For companies, you must also have been an officer or employee for that same 2-year period.
No. To qualify for BADR on the disposal of company shares, you must be an officer (such as a director) or an employee of the company for at least 2 years prior to the disposal, in addition to holding at least 5% of the shares and voting rights.