The Chancellor’s Autumn Budget on 30 October brought in immediate changes to the rates of Capital Gains Tax (CGT) – increasing the basic and higher rates to 18 and 24 per cent respectively.
Additionally, revised rates for Business Asset Disposal Relief (BADR) were announced with a staggered introduction, with significant implications for those planning to sell a business.
From 6 April 2025, BADR rates will rise to 14 per cent, reaching 18 per cent by 6 April 2026.
Depending on the level of taxable gains, this could represent a substantial increase in tax for business owners planning their exit via a sale.
How will this impact the market?
The staged rise of BADR rates is likely to prompt a flurry of sales from business owners who are either:
We expect to see more opportunities for merger and acquisition (M&A) activity, as well as management buyouts, creating a window for proactive buyers and investors.
Achieving a swift sale
If you are looking to sell your business and wish to minimise your tax liability on taxable gains, you may consider bringing the sale forward.
This should be supported by a solid plan for what you hope to achieve, with an idea of target buyers and the market potential of the business.
You can facilitate this by getting your business in the best possible position to sell with:
Remember that you have a £3,000 tax-free allowance for taxable gains each financial year, so make sure that you plan any disposals to make full use of this.
For advice on selling your business and optimising the process, contact our team to discuss your options.
