Business Asset Disposal Relief Calculator
Last updated: February 2026
Calculate BADR tax savings - 14% CGT rate on qualifying business disposals
Calculate Your BADR Tax Savings
Enter your business disposal details to see how much you could save with BADR.
Total Gain
BADR Qualifying Gain
Excess Gain (Standard CGT)
Tax With BADR
Tax Without BADR
Your Tax Savings
Check BADR Eligibility
Answer these questions to check if your disposal qualifies for Business Asset Disposal Relief.
BADR vs Standard CGT Rates
See how much you can save with Business Asset Disposal Relief compared to standard rates.
| Gain Amount | BADR Tax (14%) | Standard CGT (24%) | Tax Saved |
|---|---|---|---|
| £100,000 | £10,000 | £20,000 | £10,000 |
| £250,000 | £25,000 | £50,000 | £25,000 |
| £500,000 | £50,000 | £100,000 | £50,000 |
| £750,000 | £75,000 | £150,000 | £75,000 |
| £1,000,000 (Limit) | £100,000 | £200,000 | £100,000 |
Key Points About BADR
- Lifetime limit reduced from £10m to £1m in March 2020
- Relief claimed on gains, not sale proceeds
- Can claim multiple times up to £1m total
- 10% rate applies regardless of other income
- Must claim within 2 years of tax year of disposal
Understanding Business Asset Disposal Relief
Share Disposals
- 5% shareholding + voting rights
- Employee or director
- 2-year qualifying period
- Trading company requirement
- EMI options may qualify separately
Business Disposals
- Sole trader or partnership
- Owned for 2+ years
- Selling all or distinct part
- Must be trading business
- Includes goodwill value
What Does Not Qualify
- Investment companies
- Property letting businesses
- Less than 5% shareholding
- Shares held under 2 years
- Non-trading activities
2025/26 CGT Rates Comparison
BADR Rate
- 10% on qualifying gains
- £1 million lifetime limit
- Applies before standard rates
- Same rate for all taxpayers
Standard CGT (Non-Property)
- Basic rate: 10%
- Higher rate: 20%
- Annual exemption: £3,000
- Rates based on total income
Standard CGT (Property)
- Basic rate: 18%
- Higher rate: 24%
- Residential property surcharge
- 30-day reporting for property
Pro Tips for Accurate Results
- Double-check your input values before calculating
- Use the correct unit format (metric or imperial)
- For complex calculations, break them into smaller steps
- Bookmark this page for quick future access
Understanding Your Results
Our Business Asset Disposal Relief Calculator provides:
- Instant calculations - Results appear immediately
- Accurate formulas - Based on official UK standards
- Clear explanations - Understand how results are derived
- 2025/26 updated - Using current rates and regulations
Common Questions
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Official Sources
Complete Guide to Business Asset Disposal Relief (BADR) 2025/26
Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs' Relief, is one of the most valuable Capital Gains Tax (CGT) reliefs available to UK business owners. When you dispose of qualifying business assets, BADR reduces your CGT rate from the standard 24% down to just 14% for 2025/26 on qualifying gains up to a lifetime limit of £1 million. This can save you up to £100,000 in tax compared to paying the higher CGT rate.
BADR was rebranded from Entrepreneurs' Relief in the Finance Act 2020. The lifetime limit was simultaneously reduced from £10 million to £1 million for disposals made on or after 11 March 2020. Despite the name change and reduced limit, the relief remains a cornerstone of UK business tax planning and is claimed by approximately 50,000 individuals each year according to HMRC statistics.
HMRC BADR Rules for 2025/26 Tax Year
The current BADR rules for the 2025/26 tax year (6 April 2025 to 5 April 2026) are set by HMRC and governed by the Taxation of Chargeable Gains Act 1992 (sections 169H to 169S). Here are the key parameters:
CGT Rate with BADR
10%
vs 24% standard CGT rate
Lifetime Limit
£1,000,000
Cumulative across all claims
Maximum Tax Saving
£100,000
10% difference on £1m
Annual CGT Exemption
£3,000
Applied before BADR rate
Qualifying Conditions for BADR
Not all business disposals qualify for BADR. You must meet specific HMRC conditions depending on the type of disposal. The qualifying conditions must be met throughout a continuous 2-year period ending on the date of disposal (or the date the business ceased trading, if earlier).
1. Disposal of All or Part of a Business
If you are a sole trader or business partner disposing of the whole or part of your business, you must have owned the business for at least 2 years before the date of disposal. The business must be a genuine trading business (not an investment business or a company that mainly holds investments).
2. Disposal of Shares in a Personal Company
For share disposals to qualify, all of the following conditions must be met throughout the 2-year qualifying period:
- The company must be a trading company (or the holding company of a trading group)
- You must hold at least 5% of the ordinary share capital
- Your shares must give you at least 5% of the voting rights
- You must be entitled to at least 5% of the distributable profits and 5% of the assets on winding up (or 5% of the disposal proceeds)
- You must be an officer or employee of the company (or a company in the same group)
3. Disposal of Assets After Business Cessation
If your business has ceased trading, you can still claim BADR on the disposal of assets that were used in the business, provided:
- The assets are disposed of within 3 years of the business ceasing to trade
- The business was owned for at least 2 years before it ceased
- The assets were in use for the purposes of the business at the time it ceased
4. Associated Disposals
An associated disposal typically involves an individual disposing of an asset (such as a property) that they personally own but which has been used in a business carried on by a partnership or company in which they are a partner or shareholder. The disposal of the personal asset must be associated with a material disposal of business assets.
The 2-Year Holding Period Explained
The 2-year holding period is one of the most critical requirements for BADR. This period was increased from 1 year to 2 years for disposals made on or after 6 April 2019. Here is what you need to know:
Important: The 2-Year Rule
The qualifying conditions must be met continuously for the 2-year period. If there is any break in the conditions being met (for example, your shareholding drops below 5% for even a single day), the 2-year clock restarts. Plan carefully when issuing new shares or restructuring your business to avoid inadvertently breaking the qualifying period.
For share disposals, the 2-year period typically ends on the date you dispose of the shares. However, if the company ceases to be a trading company before the disposal, the 2-year period ends on the date it ceased trading, and you must dispose of the shares within 3 years of that date.
How to Use This Business Asset Disposal Relief Calculator
Follow these five steps to calculate your potential BADR tax saving:
- Enter your gain from selling your business or business assets — This is the capital gain (sale proceeds minus your original cost) from disposing of your business, shares, or partnership interest.
- Confirm you meet the qualifying conditions — You must have held the business or shares for at least 2 continuous years, be an officer or employee (for share disposals), hold at least 5% of shares and voting rights, and the company must be a genuine trading company.
- Check your remaining lifetime allowance — The BADR lifetime limit is £1 million of cumulative qualifying gains. If you have made previous BADR claims, enter the amount already used to see how much relief remains available.
- View your CGT at the reduced 14% BADR rate versus standard rates — The calculator shows your tax liability at the 14% BADR rate side-by-side with what you would pay at the standard 24% rate, so you can see the exact difference.
- Understand your total tax saving — Review the summary to see how much less CGT you will pay by claiming BADR. This saving can be up to £100,000 on the maximum £1 million lifetime limit.
Worked Examples: BADR Tax Savings
Example 1: Selling a Sole Trader Business
Sarah has run her consulting business as a sole trader for 8 years. She sells the entire business for £500,000. Her original investment in the business assets was £50,000.
| Sale proceeds | £500,000 |
| Less: Original cost | £50,000 |
| Capital gain | £450,000 |
| Less: Annual exemption (2025/26) | £3,000 |
| Taxable gain | £447,000 |
| CGT with BADR (14%) | £62,580 |
| CGT without BADR (24%) | £107,280 |
| Tax saved with BADR | £44,700 |
Example 2: Selling Company Shares (Exceeding Lifetime Limit)
James owns 25% of a trading company and has already claimed £600,000 of his lifetime BADR limit on a previous disposal. He now sells his remaining shares for a gain of £800,000 (after deducting costs).
| Total gain | £800,000 |
| Less: Annual exemption | £3,000 |
| Taxable gain | £797,000 |
| Remaining BADR lifetime limit | £400,000 |
| Gain taxed at BADR 14% rate | £400,000 = £40,000 tax |
| Remaining gain at standard 20% rate | £397,000 = £79,400 tax |
| Total CGT payable | £119,400 |
Without BADR on any portion, James would pay £159,400 (20% on £797,000). The partial BADR claim saves him £40,000.
Example 3: Partnership Disposal
David and Emma are equal partners in a trading partnership. They have been partners for 5 years and decide to sell the business. The total gain on the business is £300,000, split equally.
Each partner's share: £150,000 gain. After the £3,000 annual exemption, each has a taxable gain of £147,000. With BADR, each pays £14,700 in CGT (10%). Without BADR, each would pay £29,400 (20%). Combined saving: £29,400.
Sources & Methodology
This calculator is built using official HMRC rules and current tax legislation for the 2025/26 tax year. Below are the key sources and parameters used in our calculations:
- HMRC Official Guidance: Business Asset Disposal Relief (GOV.UK) — the definitive source for eligibility rules, claim process, and current rates.
- Qualifying conditions: Claimants must meet a minimum 2-year continuous qualifying period. Relief is available for sole traders, business partners, and shareholders holding at least 5% of a trading company who are also officers or employees.
- BADR tax rate: 14% Capital Gains Tax on qualifying gains for 2025/26, compared to the standard 24% CGT rate for higher and additional rate taxpayers on non-residential assets.
- Lifetime limit: £1 million cumulative qualifying gains (effective from 11 March 2020; previously £10 million). This is a per-person lifetime limit that applies across all BADR claims.
- Annual CGT exemption: £3,000 for 2025/26, applied before the BADR rate is calculated.
Disclaimer: This calculator provides estimates based on the standard BADR rules for the 2025/26 tax year. It is intended for general guidance only and does not constitute professional tax advice. Individual circumstances vary, and complex situations involving multiple reliefs, associated disposals, or mixed trading and investment companies may require professional calculation. Always consult a qualified chartered accountant or tax adviser before making decisions based on these figures.
How to Claim BADR
BADR is not applied automatically. You must actively claim it through your Self Assessment tax return. Here is the process:
- Complete your Self Assessment tax return for the tax year in which the disposal occurred
- Fill in the Capital Gains Tax pages (SA108) of your tax return
- Enter details of the disposal in the Business Asset Disposal Relief section (boxes 12-17 on the SA108 form)
- Include the total gains for which you are claiming BADR and confirm the qualifying conditions are met
- Submit your return by 31 January following the end of the tax year (or 31 October for paper returns)
Deadline Warning
You must claim BADR by the first anniversary of 31 January following the tax year of disposal. For a disposal in the 2025/26 tax year, the claim deadline is 31 January 2028. Late claims are not normally accepted by HMRC.
BADR vs Other CGT Reliefs
BADR is just one of several CGT reliefs available. Understanding how they compare can help you choose the most beneficial option:
| Relief | CGT Rate | Limit | Key Condition |
|---|---|---|---|
| BADR | 14% | £1m lifetime | 2-year ownership, trading business |
| Investors' Relief | 10% | £10m lifetime | External investor, 3-year holding |
| Gift Hold-Over Relief | Deferred | No limit | Gift of business asset |
| Rollover Relief | Deferred | No limit | Reinvestment in new business asset |
| EIS/SEIS Relief | 0% (exempt) | Per scheme | 3-year holding in qualifying company |
Note: Multiple reliefs can sometimes be combined. For example, you could use Rollover Relief to defer a gain and then claim BADR when you eventually sell. Always seek professional advice on combining reliefs.
Frequently Asked Questions About BADR
Is Entrepreneurs' Relief the same as BADR?
Yes. Business Asset Disposal Relief (BADR) is simply the new name for Entrepreneurs' Relief, changed in Finance Act 2020. The rules are essentially the same, though the lifetime limit was reduced from £10 million to £1 million at the same time. If you previously claimed Entrepreneurs' Relief, those claims count towards your £1 million BADR lifetime limit.
Can I claim BADR more than once?
Yes, you can claim BADR on multiple disposals throughout your lifetime, as long as your total qualifying gains do not exceed the £1 million lifetime limit. Each claim reduces your remaining allowance. For example, if you claim on £300,000 of gains from selling one business, you still have £700,000 of lifetime limit available for future disposals.
What happens if my company has investment activities?
The company must be a "trading company" for BADR purposes. HMRC defines this as a company whose activities do not include "to a substantial extent" activities other than trading activities. In practice, HMRC generally considers non-trading activities of more than 20% as substantial. Non-trading activities include holding investments, rental income, and investment management. If your company has significant investment holdings, it may not qualify.
Can married couples both claim BADR on the same business?
Yes, if both spouses independently meet the qualifying conditions. Each spouse has their own £1 million lifetime limit. This means a married couple could potentially shelter up to £2 million of qualifying gains at the 14% rate, saving up to £200,000 in total. Both must individually hold at least 5% of shares and voting rights and be officers or employees.
Does BADR apply to property businesses?
Generally, no. A property rental business is typically classified as an investment activity rather than a trading activity, so it does not qualify for BADR. However, property development businesses (where properties are bought, developed, and sold as part of a trade) may qualify if the activity constitutes genuine trading rather than investment. The distinction can be complex, so professional advice is recommended.
What if I dilute below 5% due to a share issue?
If your shareholding drops below 5% at any point during the 2-year qualifying period, you will not meet the conditions for BADR on a subsequent disposal. However, there is a special "anti-dilution" rule introduced in Finance Act 2019 that may apply if the dilution resulted from a share issue for commercial reasons and you held at least 5% before the dilution. In such cases, you may still be able to claim BADR on gains accrued up to the dilution event. Seek specialist tax advice if this applies to you.
How accurate is this BADR calculator?
Our calculator uses the official 2025/26 HMRC rates and rules, including the 10% BADR rate, £3,000 annual CGT exemption, and £1 million lifetime limit. It provides a reliable estimate for straightforward disposals. However, complex situations involving multiple reliefs, associated disposals, or mixed trading/investment companies may require professional calculation. We recommend using this tool as a starting point and consulting a chartered accountant or tax adviser for your specific circumstances.