BADR Calculator 2026/27
By Omair SaoLast reviewed — BADR rate 18% for disposals on or after 6 April 2026 (14% for 2025/26 disposals). See how we check our figures.
Selling your UK limited company? Business Asset Disposal Relief (BADR) taxes qualifying gains at 18% for disposals on or after 6 April 2026, up from 14% in 2025/26. Enter your figures below to calculate your CGT bill, see how much of the gain is covered by the £1 million lifetime limit, and compare the result with the old 14% rate if your sale exchanged contracts earlier.
This calculator provides estimates only and does not constitute tax or financial advice. BADR eligibility requires meeting strict conditions — minimum 5% shares, 2+ years as officer or employee, business qualifying as a trading company. Consult a qualified tax adviser before making exit decisions.
How Business Asset Disposal Relief Works
When you sell a qualifying business or shares in your company, BADR replaces the standard Capital Gains Tax rates (18% basic / 24% higher) with a reduced flat rate. The rate was 14% for 2025/26 and is 18% for disposals from 6 April 2026. Each individual has a lifetime limit of £1,000,000 of qualifying gains — after that, standard CGT rates apply.
Before calculating CGT you deduct your annual CGT exemption of £3,000 from the gain. The relief then applies to any gains up to your remaining lifetime allowance. Any excess is taxed at the standard CGT rate (18% if you have remaining basic-rate band, 24% otherwise).
| Tax Year | BADR Rate | Standard CGT (basic) | Standard CGT (higher) | Lifetime Limit |
|---|---|---|---|---|
| Up to 5 April 2025 | 10% | 18% | 24% | £1,000,000 |
| 6 April 2025 – 5 April 2026 | 14% | 18% | 24% | £1,000,000 |
| 6 April 2026 onwards | 18% | 18% | 24% | £1,000,000 |
BADR Qualifying Conditions
BADR applies to the disposal of all or part of a trading business, or shares in a personal company. For shares you must meet all three conditions throughout the 2 years before the disposal date:
- 1
5% shares and voting rights
You must hold at least 5% of the ordinary share capital and 5% of the voting rights in the company.
- 2
Officer or employee
You must be a director, company secretary, or employee of the company (or group). A non-employed shareholder does not qualify for BADR — see Investors' Relief instead.
- 3
Trading company
The company must be a trading company (or the holding company of a trading group) — not a shell, investment company, or property investment company. HMRC checks that trading activities are not 'substantial' investment activities.
- 4
2-year qualifying period
All conditions above must have been met for a continuous period of at least 2 years ending on the disposal date (or the date the company ceased trading, if within the previous 3 years).
Tax Planning Strategies for a Business Exit
Pin down your disposal date
For shares, the disposal date is normally the date contracts become unconditional, not completion. A sale exchanged before 6 April 2026 is taxed at 14% even if the money arrived later; anything exchanged on or after that date is at 18%. Keep the paperwork that proves the date.
Use a Members' Voluntary Liquidation (MVL)
An MVL distributes company reserves as capital rather than income, allowing BADR to apply. It is typically cost-effective when reserves exceed approximately £35,000 and all shareholders qualify for BADR.
Maximise employer pension contributions before exit
Making employer pension contributions before completion reduces the company's distributable profits and can reduce the effective gain if you are extracting accumulated reserves.
Holdover or defer via EIS/SEIS reinvestment
Reinvesting proceeds into an EIS-qualifying company within 3 years can defer CGT on the gain. Combined with BADR, this can significantly reduce the immediate tax charge.
Spousal share transfer before disposal
Transferring shares to a spouse before the sale allows the gain to be split between two individuals, each with their own £3,000 annual exemption and potentially their own BADR lifetime allowance.
Ensure the 2-year window is met
If you have been a director/employee for less than 2 years, consider whether the qualifying period can be met before exchanging contracts — even a short delay may unlock the full BADR rate.
Tax planning around a business exit is complex and the right approach depends on your specific circumstances. Always consult a specialist M&A tax adviser or chartered accountant before making disposal decisions.
Who this BADR calculator is for
- Company owners planning to sell their shares, or their whole business, and wanting to know the Capital Gains Tax bill before they agree a price.
- Directors closing a solvent company through a members' voluntary liquidation, where the final distribution is treated as a capital gain.
- Sole traders and partners selling a business or their share of one, since Business Asset Disposal Relief covers those disposals too.
- Anyone who sold in 2025/26 at the old 14% rate and now needs the figures for their 2025/26 tax return, or who is comparing an earlier offer with one completed after 6 April 2026.
How the BADR calculator works
- 1
Work out the gain
The gain is the sale proceeds less what the shares or assets cost, less the costs of buying and selling them (legal and broker fees, for example). If you founded the company for £100 of share capital, almost the whole sale price is gain.
- 2
Deduct the annual exempt amount
Every individual can make £3,000 of gains tax-free in 2026/27. The calculator deducts it from the gain before applying any rate.
- 3
Apply BADR to the qualifying part
Gains that qualify for Business Asset Disposal Relief are taxed at 18% for disposals on or after 6 April 2026 (the rate was 14% for 2025/26 and 10% before April 2025). Each person has a £1 million lifetime limit; anything already claimed on earlier disposals reduces what is left.
- 4
Tax the rest at standard CGT rates
Gains above the lifetime limit, or that do not qualify, are taxed at 18% if they fall within your unused basic rate band and 24% above it. The calculator uses the income figure you enter to decide how much basic rate band is left.
- 5
Check the qualifying conditions
For shares you must, for the two years before the sale, have held at least 5% of the ordinary share capital and voting rights, been an officer or employee, and the company must have been trading. The calculator assumes you meet them; if you do not, the whole gain is taxed at the standard rates.
Worked examples
Sale for £600,000 completed in 2026/27, all qualifying
A founder sells 100% of a trading company for £600,000. The shares cost £50,000 including fees, no BADR has been claimed before, and their other income is £30,000.
| Proceeds | £600,000 |
| Cost of shares and disposal costs | £50,000 |
| Gain | £550,000 |
| Annual exempt amount | £3,000 |
| Taxable gain, all within the £1m lifetime limit | £547,000 |
| CGT at the 18% BADR rate | £98,460 |
| Net proceeds after tax | £501,540 |
Result: The effective rate on the whole gain is 17.9%. Had the same sale completed before 6 April 2026, the bill would have been £76,580 at 14%, so the rate change cost £21,880.
Sale for £1.5 million, part above the lifetime limit
A larger exit where the gain exceeds the £1 million BADR lifetime limit. Cost £100,000, other income £60,000, no earlier claims.
| Gain | £1,400,000 |
| Taxable gain after the £3,000 exemption | £1,397,000 |
| Gain covered by BADRTaxed at 18% = £180,000 | £1,000,000 |
| Gain above the lifetime limitTaxed at 24% = £95,280, as income already uses the basic rate band | £397,000 |
| Total CGT | £275,280 |
| Net proceeds after tax | £1,224,720 |
Result: The effective rate is 19.7%. Because the basic-rate CGT rate is now the same 18% as BADR, the relief only matters against the 24% higher rate.
Figures use the 2026/27 rates and rules described above, are rounded to the nearest pound, and were last checked against GOV.UK on 25 September 2026.
Assumptions and limitations
- The disposal date is the date contracts become unconditional (exchange), not completion, which is what determines whether the 14% or 18% rate applies.
- All conditions for BADR are met for the full two-year qualifying period, and the company is a trading company rather than one with substantial investment activities.
- Proceeds are received in cash on completion. Deferred consideration, earn-outs and loan notes are taxed under different timing rules and may not all qualify for BADR.
- No other gains are made in the tax year, so the full £3,000 annual exempt amount is available against this disposal.
- The income figure entered is your taxable income for the year excluding the gain; it determines how much of any non-BADR gain is taxed at 18% rather than 24%.
- Investors' Relief, holdover relief, EIS deferral relief and the treatment of spouses' shareholdings are not modelled. Splitting a shareholding with a spouse before sale can double the available exemption and lifetime limit but must be done well in advance.
Official sources
The figures used by this calculator come from the following official pages. Read how we check our figures.
- Business Asset Disposal Relief — GOV.UK — Eligibility, rates and the lifetime limit
- HS275 Business Asset Disposal Relief (2026) — GOV.UK — HMRC helpsheet for the 2026 return
- Capital Gains Tax rates — GOV.UK — 18% and 24% standard rates
- Capital Gains Tax allowances — GOV.UK — The £3,000 annual exempt amount
- Closing a limited company: members' voluntary liquidation — GOV.UK
Further reading on IncomeFix
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Frequently Asked Questions
What is Business Asset Disposal Relief (BADR)?
Business Asset Disposal Relief (formerly Entrepreneurs' Relief) is a UK Capital Gains Tax relief that reduces the CGT rate on qualifying business disposals. The rate is 18% for disposals on or after 6 April 2026, up from 14% in 2025/26 and 10% before April 2025. The lifetime limit is £1,000,000 of qualifying gains per individual.
How much CGT will I pay when I sell my company?
If BADR applies, you pay 18% CGT on qualifying gains up to the £1,000,000 lifetime limit for disposals on or after 6 April 2026 (14% if your disposal was in 2025/26). Gains above the BADR lifetime limit are taxed at the standard CGT rates of 18% (basic rate) or 24% (higher rate). You also deduct the annual CGT exemption of £3,000 before calculating tax.
What are the BADR qualifying conditions?
To qualify for BADR you must: (1) own at least 5% of the ordinary shares and 5% of voting rights; (2) have been an officer or employee of the company throughout the 2 years before disposal; (3) the company must be a trading company (or holding company of a trading group) throughout those 2 years. Disposals of qualifying assets of an unincorporated business also qualify.
Why did the BADR rate increase to 18% in April 2026?
The Chancellor announced in the October 2024 Autumn Budget that BADR would increase in two steps: from 10% to 14% on 6 April 2025, and from 14% to 18% on 6 April 2026. The 18% rate now matches the standard basic-rate CGT rate for other assets, so for 2026/27 the relief only saves tax against the 24% higher rate.
How much did the April 2026 rate rise add to a typical CGT bill?
The rise from 14% to 18% added 4 percentage points to the tax on BADR-qualifying gains. On a £500,000 qualifying gain that is £20,000 more; on the full £1,000,000 lifetime limit it is £40,000. If your disposal date (normally the date contracts were exchanged) was before 6 April 2026, the 14% rate still applies to it, and the calculator shows both figures.
What is the BADR lifetime limit?
Each individual has a £1,000,000 lifetime BADR limit — that is the total gains (not proceeds) on which they can ever claim BADR. If you have used part of your allowance in previous disposals, the remaining balance reduces accordingly. Gains above the lifetime limit are taxed at standard CGT rates.
Can I claim BADR on shares I have held for less than 2 years?
No. BADR requires that the qualifying conditions (5%+ shares, officer or employee status, trading company) have been met for at least the 2 years immediately before the disposal. Shares held for less than 2 years do not qualify, though you can still benefit from the £3,000 annual CGT exemption and standard CGT rates.
What is the difference between BADR and Investors' Relief?
BADR applies to working shareholders — people who own 5%+ shares and are officers or employees. Investors' Relief applies to external investors (not officers or employees) who subscribed for shares in unlisted trading companies. Investors' Relief has a separate £10 million lifetime limit and also carries an 18% rate, the same as BADR from April 2026.