How will the Autumn Budget affect the sale of my business?
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 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.
Speculation About Upcoming Changes
With the upcoming budget, there is speculation that this will be further amended: whether that be a reduction in the lifetime limit, more stringent conditions for its use or an increase in the CGT rate itself. This seems plausible, due to the omission of both BADR and CGT in Labour’s pledge that they will not increase income tax, national insurance or VAT. Furthermore, Starmer’s recent statement that “there is a budget coming in October, and it’s going to be painful” will do nothing to reduce this speculation.
Why You Should Act Now
If you are planning on buying or selling a business, or currently in negotiations to do so, then it is crucial for you to take legal advice as soon as possible. The legal side of a business sale or purchase often takes around 3 months, so if you are just starting out this process and wish to complete before the budget, the deadline is fast approaching. Therefore, both parties involved will need to take a pragmatic and commercial approach to the deal, to ensure that it can get over the line with this accelerated timetable.
How Lawson West Solicitors Can Help
At Lawson West Solicitors, our dedicated team of 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. Our goal is to help you secure the best deal possible, while navigating the possible tax changes ahead.
Please contact us on telephone 0116 212 1000 or 01858 445 480, alternatively fill in the free Contact Us form and we will get in touch as soon as possible.
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