For owner-managers, capital gains tax (CGT) has long been a central factor in exit planning.
However, recent and upcoming changes to business asset disposal relief (BADR), alongside broader fiscal pressures, mean the rules are shifting more quickly than many expect.
With April approaching, advisers are increasingly seeing the need for earlier and more proactive planning. This is not only to optimise tax outcomes but also to provide greater certainty at key points in a business owner’s journey.
What’s changing and why timing matters more than ever
BADR has long been a cornerstone of exit planning for owner-managers, offering a preferred CGT rate on qualifying disposals.
However, its generosity has been steadily eroded. From April 2025, the rate rises from 10% to 14%, increasing again to 18% for 2026/27, while the new CGT main rate is 24%, up from 20% in October 2024. The £1 million lifetime limit remains, but reliefs that once eased the tax burden on exits are clearly being reduced.