Business Asset Disposal Relief, called Entrepreneurs' Relief until 2020, has been the main relief on the sale of an owner-run business since April 2008. Since then its rate, its lifetime limit and the tax on gains above the limit have all moved, some more than once. Together they decide how much of the price an owner keeps.
The chart shows the Capital Gains Tax on the same gain for a sale at each point since 2008. Pick a gain to see how it changes.
On a £5,000,000 gain, the tax is now £1,140,000, up from £500,000 at its lowest, and £1,170,000 for sales from 6 April 2027
On a £5,000,000 gain, the tax is now £1,140,000, up from £500,000 at its lowest, and £1,170,000 for sales from 6 April 2027
- 6 April 2008 to 5 April 2010£820,000
- 6 April 2010 to 22 June 2010£740,000
- 23 June 2010 to 5 April 2011£500,000
- 6 April 2011 to 5 April 2016£500,000
- 6 April 2016 to 10 March 2020£500,000
- 11 March 2020 to 29 October 2024£900,000
- 30 October 2024 to 5 April 2025£1,060,000
- 6 April 2025 to 5 April 2026£1,100,000
- 6 April 2026 to 5 April 2027£1,140,000
- From 6 April 2027, announced£1,170,000
The relief rate held at 10% for 17 years
When Entrepreneurs' Relief began on 6 April 2008, every gain was taxed at a single Capital Gains Tax rate of 18%. The relief cut a qualifying gain by four-ninths before the tax was worked out, which came to an effective 10%. From 23 June 2010, qualifying gains were taxed at a flat 10%.
That rate lasted until 5 April 2025. It rose to 14% for sales from 6 April 2025, and to 18% for sales from 6 April 2026. At 18%, the relief rate is now the same as the basic rate of Capital Gains Tax, so it only saves tax on gains that would otherwise be taxed at 24%.
The lifetime limit went up to £10,000,000 and back to £1,000,000
| Date of sale | Lifetime limit |
|---|---|
| 6 April 2008 to 5 April 2010 | £1,000,000 |
| 6 April 2010 to 22 June 2010 | £2,000,000 |
| 23 June 2010 to 5 April 2011 | £5,000,000 |
| 6 April 2011 to 10 March 2020 | £10,000,000 |
| From 11 March 2020 | £1,000,000 |
The limit covers your whole lifetime rather than each tax year, so gains you claimed the relief on before March 2020 count towards today's £1,000,000. With a £10,000,000 limit, a sale had to be very large before any of the gain was taxed at the main rates. Since March 2020, anything above £1,000,000 has been.
The Budget on 28 October 2026 halves the limit again, to £500,000, for disposals made from 6 April 2027. On a £5,000,000 gain, that takes the tax from £1,140,000 to £1,170,000. What the Budget does to the tax on selling your business works it out for your own gain and sale date.
Gains above the limit
| Date of sale | Rate for a higher rate taxpayer |
|---|---|
| 6 April 2008 to 22 June 2010 | 18%, a single rate for everyone |
| 23 June 2010 to 5 April 2016 | 28% |
| 6 April 2016 to 29 October 2024 | 20% |
| From 30 October 2024 | 24% |
These are the rates for business assets and shares. Residential property had its own, higher rates from 2016 to October 2024. Gains above the limit can be taxed at the basic rate if any of your basic rate band is left after the gains that qualify for the relief, but on a sale of this size there usually isn't.
What it means if you're thinking of selling
- The date of the sale decides the rules. For most sales it's the date an unconditional contract is made, which can be before completion.
- How the price is paid matters too. A fixed sum paid later usually counts at the time of the sale, while an earn-out is taxed differently. Our guide to earn-outs and deferred consideration explains how.
- Rates can change at any Budget. The limit is due to fall to £500,000 for sales from 6 April 2027. Plan with the rules for your sale date, and check again before you agree heads of terms.
Our business sale tax calculator works through your own figures at today's rates, and our guide to Business Asset Disposal Relief covers who qualifies.
How we worked out the figures
Each figure is the Capital Gains Tax on a gain that qualifies in full for the relief, for an owner who has used none of the lifetime limit and, where there's more than one rate, pays the higher rate on anything above it. They're worked out before the annual tax-free allowance, which has never been more than £12,300 and is £3,000 today, so the real figures would be a little lower. They're illustrations to show how the rules have moved, not calculations for your situation.