What is Business Asset Disposal Relief (BADR)?

Business Asset Disposal Relief (BADR), formerly called Entrepreneurs' Relief, reduces the capital gains tax rate to 10% on the first £1 million of qualifying business disposal gains over a lifetime. To qualify, individuals must own at least 5% of the shares and voting rights and be an officer or employee of the company for at least two years before the disposal date. Following the October 2024 Budget, the 10% rate increases to 14% from April 2025 and 18% from April 2026, reducing its attractiveness compared with the previous regime. The relief applies to disposals of the whole or part of a trading business, as well as assets used in a business upon its cessation.