Business Sales and recent developments
What Is Business Asset Disposal Relief?
Business Asset Disposal Relief (BADR) is a tax relief for Capital Gains Tax (CGT), available on the sale of certain assets, including company shares. Of course, this comes with many different requirements and caveats. If the various conditions are met, the gains made on shares are subject to a special CGT rate of 10%, rather than the usual 20%. The lifetime cap for BADR has fluctuated throughout its lifetime, most recently being slashed from £10 million to £1 million in 2020.
What Are The Changes From The Autumn Budget?
The lifetime limit of £1 million will remain, but the rate of CGT that applies to BADR is going to increase from 10% in this current tax year, to 14% on 6th April 2025 and increasing further to 18% on 6th April 2026.
In order to benefit from the 10% rate of CGT, you would need to complete the deal before the end of this current tax year. For example, if you are looking to sell a business for £1 million then completing that sale on 5th April 2025 may mean you pay £100,000 in CGT and completing that sale on 6th April 2025 may mean you pay £140,000 in CGT.
Why You Should Act Now
If you are planning on buying or selling a business, or currently in negotiations to do so, and wish to complete before April 2025, the quicker you start the process the better. The legal side of a business sale or purchase often takes around three months, so if you are just starting out this process and wish to complete before the changes take effect, the deadline will soon be approaching. We can work closely with accountants, corporate finance advisers, etc, to endeavour to meet your deadline.
How Lawson West Solicitors Can Help
At Lawson West Solicitors, our dedicated specialists in corporate acquisitions and sales have the expertise and commitment to guide you through the process. We are here to ensure that every deal is as fair, pragmatic and commercial as possible and aligned with your best interests.
Please call us on 0116 212 1000, or complete our free Contact Us form and we will get in touch as soon as possible.
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