Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Capital gains tax definition

What does Capital gains tax mean? Capital gains tax (CGT) is the tax on the profit (chargeable gain) realised when a chargeable asset is disposed of, for example by sale, gift or exchange of shares, land or a business. The concept and computation are statutory: in the UK, principally the Taxation of Chargeable Gains Act 1992; in Ireland, the Taxes Consolidation Act 1997. CGT primarily applies to individuals and trusts. In the UK, companies do not pay CGT; their gains are within corporation tax. In Ireland, companies are generally taxed on chargeable gains under corporation tax, typically at the CGT rate. Key features include an annual exempt...

Business Asset Disposal Relief for EMI options: UK conditions C and D, holding periods, trading status, disqualifying events, reorganisations and share identification rules

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Practice notes

Business asset disposal relief

Business asset disposal relief (BADR) is a capital gains tax (CGT) relief intended to encourage individuals to start and grow their own businesses. Where the qualifying conditions are met, for disposals made on or after 6 April 2026 the CGT rate on specified business assets is reduced to 18%. Before 6 April 2025 the rate available under BADR was 10%, rising to 14% from 6 April 2025 under the Finance Act 2025, which also provided for a further increase to 18% for disposals on or after 6 April 2026.

Individuals operating as sole traders or in partnership
Individuals disposing of shares in, or securities of, a company
Trustees of a settlement holding the business assets

Companies are not eligible for BADR in respect of chargeable gains that they realise. A lifetime cap limits the total amount of BADR that any one individual can claim...

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Web page updated on 21/05/2026

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