Business Asset Disposal Relief

If you’re thinking of selling your business, you could qualify for Business Asset Disposal Relief (previously known as Entrepreneurs Relief). This is a reduction in the amount of Capital Gains Tax that you might need to pay on the sale of your business.

Get Started

What is Business Asset Disposal Relief?

If you are eligible to claim BADR then you will pay Capital Gains Tax at 10% on the gains made on the disposal of qualifying assets up to a lifetime litmit of £1 million. if you shut down or sell your business. For gains not qualifying for BADR you will pay tax at up to 28%.


Do I qualify for Business Asset Disposal Relief?

To qualify for the tax relief, you have to be selling all or part of your business, and the following conditions must be applicable to you for at least the last two years and up until the date you sell the business: 

  • You have held 5% or more of the business’ share capital and 5% of the voting share capital. 
  • You are an employee or office holder of a limited company or the sole trader or business partner of the business. 
  • You meet the qualifying period of two years, with the end date being the date of share disposal. 
  • You haven’t gone over the lifetime cap of £1 million.  

Jan McDermott Chartered Accountants can help you plan and determine your eligibility for this relief.

What happens if the business ceases trading?

The trading requirement will be available if the company has stopped trading as long as they have: 

  • Satisfied trading conditions for 1 year ending on the day the company ceases trading and 
  • Stopped trading within 3 years finishing on the date of disposal of assets. 

You will need to use an insolvency specialist as there can be challenging issues around when the trade ceased.

How we can help

Jan McDermott Chartered Accountants specialises in all accountancy and tax support for businesses including planning for  Business Asset Disposal Relief. If you need help checking your eligibility and securing your BADR, our experienced team will be on hand to help. We work closely with all our clients and always make sure claims for relief are handled accurately and efficiently.  

Contact one of the team to see how you can make a claim for BADR.

Get A Free Quote

Frequently Asked Questions

If a business or a member of its group becomes part of a joint venture, the trading status of each company should be considered separately. There are tests presented in the legislation that can be used to calculate whether the direct and indirect shareholdings are enough to meet the necessary conditions for a BADR claim.

BADR has been extended to investors, known as Investors Relief. Under this scheme, capital gains made by investors will be taxed at 10% if they meet the requirements for the relief below:

  • They don’t have to be an officer, director, or employee of the business 
  • Investors can’t have any preference arrangements with the company 
  • The shares have to be newly issued shares, meaning transfers of shares from existing owners won’t qualify and 
  • The shares need to have been issued on or after 6th April 2016 and been held for three years before disposal.

Alan Robson

They provide us with a fully outsourced finance function so that our own team can focus on our business. They implemented Xero software from day one of the company meaning that we have real-time visibility of our business at all times, The monthly management accounts meetings we have with Jan really add value to decision-making and strategic planning and we wouldn’t be without them.

Peter Broxton

Their professionalism, expertise and client care are outstanding and they have supported our growing business no end. They look after everything from our bookkeeping, VAT, annual accounts, as well as claiming Research & Development tax relief, preparing budgets and forecasts and assisting with grant claims. The whole team are always responsive, friendly and reliable and we wouldn’t hesitate to recommend them to anyone looking for a trustworthy and efficient firm to look after their business finance requirements.

Scott Hackett

I moved my accounts over to Jan at the beginning of the year and have been extremely impressed with her attention to detail and precision. She’s made it easy for me to understand and manage all the key aspects of my accountancy, as well as offering useful suggestions of ways to improve and make things work more efficiently for me and my business. I’d highly recommend Jan and her team to anyone looking for professional, friendly, and reliable accountants that truly get to know you and offer a tailored service.”

Alistair Evans

Jan McDermott & Co have been our accountants for over 15 years and have not only ensured our accounting records are accurate and legal, but also provided us with first class advice to help us grow. They recommended our move to Xero accounting software which has revolutionised our business, allowing us to create predictable income through the use of Go Cardless Direct Debits, and streamlining our day to day accounting operations. Jan and her team are friendly,  easy to work with and take time to understand a particular problem or situation. I wouldn’t hesitate to recommend them to any business that wants an accountancy firm they can grow with and depend on.