Business Asset Disposal Relief (BADR) Calculator

Business Asset Disposal Relief (BADR), formerly Entrepreneurs' Relief, reduces Capital Gains Tax to 10% on qualifying business disposals — up to a £1 million lifetime limit. Use this calculator to est

Sale proceeds (£)

Allowable costs / cost base (£)

BADR lifetime allowance already used (£)

Your income tax band

How BADR Works in 2025/26

BADR gives a 10% CGT rate (instead of 18% or 24%) on gains from disposing of qualifying business assets, subject to a £1 million lifetime limit. The lifetime allowance was reduced from £10 million to £1 million in March 2020.

Qualifying for BADR — Sole Trader / Partnership

You must have owned the business for at least 2 years before disposal
You must be disposing of the whole business, part of it, or assets used in the business after it ceases
The business must have ceased trading, or you must be withdrawing from it

Qualifying for BADR — Company Shares

You must hold at least 5% of ordinary share capital and voting rights
You must be an employee or officer of the company
The company must be a trading company (or holding company of a trading group)
These conditions must be met for at least 2 years before disposal

Tax Comparison: With and Without BADR

Gain	Without BADR (24% upper rate)	With BADR (10%)	Saving
£200,000	£48,000	£20,000	£28,000
£500,000	£120,000	£50,000	£70,000
£1,000,000	£240,000	£100,000	£140,000

Calculations above assume full annual exempt amount used, higher rate taxpayer. Gains above £1m lifetime limit taxed at standard CGT rates.

Important: Investor's Relief

If you don't qualify for BADR (e.g., you're a passive investor, not an employee), you may qualify for Investor's Relief — a separate 10% CGT rate with a £10 million lifetime limit for long-term unlisted company shares held for at least 3 years.

Frequently Asked Questions

What is the BADR lifetime limit in 2025/26?

The Business Asset Disposal Relief lifetime limit is £1 million. This means you can claim BADR on total qualifying gains of up to £1 million across your lifetime. Gains exceeding this limit are taxed at standard CGT rates (18% basic rate, 24% higher rate from April 2024).

Is Entrepreneurs Relief the same as BADR?

Yes. Entrepreneurs' Relief was renamed Business Asset Disposal Relief (BADR) in March 2020. The name changed but the mechanism is the same — 10% CGT on qualifying business disposals. The lifetime limit was simultaneously cut from £10 million to £1 million.

What CGT rate does BADR give?

BADR gives a 10% CGT rate on qualifying gains, regardless of whether you're a basic or higher rate taxpayer. Without BADR, higher rate taxpayers pay 24% CGT on business asset gains (18% basic rate) from April 2024 onwards.

Do I lose BADR if I sell shares gradually?

No, you can make multiple disposals over time and claim BADR on each, as long as you haven't exhausted your £1 million lifetime limit. Each disposal reduces your remaining lifetime allowance.

Can a director of a limited company claim BADR?

Yes, if you hold at least 5% of ordinary shares, have voting rights, are an employee or officer (including director), and the company is a trading company. All conditions must be met for at least 2 years before the disposal date.

What happens to BADR gains above £1 million?

Gains above the £1 million lifetime limit are taxed at standard CGT rates — 18% if you're a basic rate taxpayer, 24% if higher rate (rates applying from April 2024). The first £1 million is still taxed at 10%.

Does the CGT annual exempt amount apply with BADR?

Yes. You deduct the annual exempt amount (£3,000 in 2025/26) from your total gains before calculating CGT. The remaining gain (up to £1m lifetime) is taxed at 10% under BADR.

What is Investor's Relief and how does it differ from BADR?

Investor's Relief (IR) also gives a 10% CGT rate but has a £10 million lifetime limit. IR applies to unlisted trading company shares held for at least 3 years, subscribed for after 17 March 2016. Unlike BADR, you don't need to be an employee — it's for external investors.