If you’re planning to sell your business, the timing of your exit could make a meaningful difference to how much you keep after tax.
From April 2026, the UK government is set to increase the Business Asset Disposal Relief (BADR) rate from 14% to 18%. For owners who qualify for BADR and are already considering a sale, there may be a financial case for bringing the transaction forward.
Martin Brown, CEO of Elephants Child, a business growth advisory firm, uses a real‑world scenario to illustrate the impact of selling in November 2025 versus June 2026.
At a glance
- Selling before April 2026 could offer tax advantages under the current BADR rate.
- Shareholders may retain more of the sale proceeds by completing the transaction before the change.
- The decision should balance tax efficiency with broader considerations, such as market conditions, buyer readiness, and long‑term goals.
The example scenario
- Sale price: £6,000,000
- Shareholders: Two individuals, each owning 50%
- Shareholding duration: Five years (qualifying for BADR)
Transaction costs
- Legal: £60,000
- Accountancy: £30,000
- Corporate finance: £35,000 fixed + 3.5% success fee (£210,000)
- Total costs: £335,000
Tax assumptions
- BADR allowance: £1,000,000 per shareholder
- CGT rates:
- November 2025: 14% on BADR‑qualifying gains, 24% on remaining gains
- June 2026: 18% on BADR‑qualifying gains, 24% on remaining gains
