If you're planning to sell your business, or close it and take out what's left, the Budget on 28 October 2026 changed one of the numbers that matters most. Business Asset Disposal Relief, which taxes qualifying gains at 18% instead of up to 24%, will cover only the first £500,000 of your lifetime gains from 6 April 2027, down from £1,000,000.
HMRC publishes how many people claim the relief and on what size of gain, so it's possible to see who the change reaches, and what it costs them.
From April 2027, a £1,000,000 gain costs up to £30,000 more in tax
- £250,000 gainNo change
- £500,000 gainNo change
- £600,000 gain£6,000 more
- £750,000 gain£15,000 more
- £1,000,000 gain£30,000 more
- £2,000,000 gain£30,000 more
What the Budget changed
The relief's rate stays at 18%. Its lifetime limit falls from £1,000,000 to £500,000 for disposals made from 6 April 2027, and the government will legislate in the Finance Bill 2026 to 2027. The Treasury's figures show it raising £60 million in 2027 to 2028, rising to £305 million a year by 2031 to 2032.
For gains above £500,000, the extra tax is 6% of the slice up to £1,000,000, for an owner who pays the higher rate. On a £750,000 gain that's £15,000; on £1,000,000 or more, £30,000. Gains below £500,000 are taxed exactly as they are today.
Who it reaches
The Treasury says three quarters of claimants will still get the relief on their whole gain, and HMRC's own figures bear that out. In 2024 to 2025, 46,000 of the 61,000 people who claimed, 75%, did so on gains under £500,000. The 15,000 who claimed on more accounted for 69% of the £18.4bn of gains.
| Tax year | People claiming | On gains of £500,000 or more | On £1,000,000 or more |
|---|---|---|---|
| 2021 to 2022 | 48,000 | 10,000 | 5,000 |
| 2022 to 2023 | 45,000 | 10,000 | 5,000 |
| 2023 to 2024 | 42,000 | 8,000 | 4,000 |
| 2024 to 2025 | 61,000 | 15,000 | 7,000 |
Most years, that's 8,000 to 10,000 people. 2024 to 2025 was higher, 15,000. It was the last year with the relief at 10%, and our study of solvent closures shows owners bringing decisions forward before each rise.
Before 6 April 2027
Disposals made before 6 April 2027 still get today's £1,000,000 limit. In the past, owners have moved quickly when a change was coming: our study of owners rushing to close before tax rises found solvent liquidations more than doubled in the month before each of the last three changes to the tax on selling. A sale takes longer than a closure, so an owner who wants to sell before the new limit starts has less than six months from the Budget to agree and complete it.
Founders' Relief
The same Budget announced Founders' Relief: a 10% rate of Capital Gains Tax on up to £10,000,000 of lifetime gains, from 6 April 2027, for founders of and significant early investors in high-growth, innovative UK companies. Which companies will count is out for consultation until 30 November 2026, so it isn't yet clear how many owner-run businesses it will reach.
What it means if you're planning to sell
If your gain is likely to be under £500,000, nothing changes. If it's likely to be more, the timing of a sale or a closure now has a cost attached, and it's worth knowing what yours would be before you decide. Our business sale tax calculator works out the tax on your own figures, and how the tax on selling a business has changed since 2008 shows how far it's moved. This is general guidance, not tax advice. Take advice before you act on it.
How we worked out the figures
The change, its start date and the Treasury's costings are from the Budget 2026 document. The extra tax assumes a higher rate taxpayer with no earlier claims whose whole gain qualifies for the relief, so the slice between £500,000 and £1,000,000 is taxed at 24% instead of 18%; it leaves out the annual tax-free allowance, which is the same either way. Claims are HMRC's figures from Self Assessment returns, in its Capital Gains Tax statistics published in 2026. HMRC counts Business Asset Disposal Relief and Investors' Relief together, rounds people to the nearest thousand and money to the nearest million pounds, and reports gains before losses and the tax-free allowance. 2024 to 2025 is provisional.