What Budget 2026 means for owners planning to sell: the £500,000 business asset disposal relief limit from 6 April 2027

In short

Business asset disposal relief's lifetime limit falls from £1 million to £500,000 for qualifying disposals made on or after 6 April 2027, a change announced in the Budget of 28 October 2026 for Finance Bill 2026-27. The rate stays at 18 per cent in 2027-28. HMRC's impact note of 29 October 2026 expects about 13,000 of roughly 51,000 claimants to be affected, and a higher-rate gain of £1 million from 6 April 2027 costs £30,000 more.

Key takeaways

• Budget 2026 announced that the business asset disposal relief lifetime limit will fall from £1 million to £500,000 for qualifying disposals made on or after 6 April 2027, and the limit counts relief already claimed in past years.
• The relief's rate is 18 per cent from 6 April 2026 and stays at 18 per cent in the 2027-28 tax year, against 14 per cent in 2025-26 and 10 per cent before 6 April 2025.
• HMRC estimated on 29 October 2026 that 75 per cent of approximately 51,000 claimants are unaffected and about 13,000 individuals are affected, 81 per cent of them aged 45 to 74.
• The Budget 2026 costings of 28 October 2026 expect some owners to change the timing of their disposals, and unconditional contracts made before 6 April 2027 but completed after it are held to the new limit unless the parties show no tax-timing purpose.
• The Gazette carried 970 notices of a members' voluntary winding-up in October 2026, against 526 in September 2026, and 309 in the Budget week of 26 to 30 October 2026.

What did Budget 2026 change for business asset disposal relief?

Budget 2026 halved the lifetime limit. The Chancellor announced on 28 October 2026 that the limit on gains qualifying for business asset disposal relief (BADR) falls from £1 million to £500,000, and HMRC's tax information and impact note, published on 29 October 2026, sets the operative date: qualifying disposals made on or after 6 April 2027.

The change is announced, not enacted: the Budget 2026 overview says the government will legislate in Finance Bill 2026-27 (HMRC's impact note of 29 October 2026 calls it "the Finance Bill 2026"), and the current law, section 169N of the Taxation of Chargeable Gains Act 1992, still carries the £1 million limit as at 2 November 2026.

The impact note of 29 October 2026 adds that the limit is lifetime and cumulative: it "must take into account the value of relief claimed in respect of qualifying gains in the past", so an owner who has claimed relief on £500,000 or more of gains before 6 April 2027 has no limit left after it. It also brings in rules for contracts signed before that date, set out below, and a rule for share reorganisations: where an owner elects under section 169Q of the 1992 Act to disapply the reorganisation rules and makes that election on or after 6 April 2027, the disposal is treated as made at the election, so the 2027 limit applies.

What rate does business asset disposal relief charge from 2025-26 to 2027-28?

The rate path was already in place before this Budget and is unchanged by it: 14 per cent for disposals from 6 April 2025 and 18 per cent from 6 April 2026, on gov.uk's relief guidance as read on 2 November 2026. Budget 2026's rates annex of 28 October 2026 keeps the relief at 18 per cent in the 2027-28 tax year and keeps the main Capital Gains Tax rates at 18 per cent and 24 per cent.

The table sets the relief's rate and lifetime limit tax year by tax year, from those two primary sources and HMRC's impact note of 29 October 2026.

The arithmetic follows from the table. In the 2026-27 tax year, the relief is worth at most 6 percentage points on £1 million of gains for a higher-rate taxpayer, which is £60,000. From 6 April 2027 it is worth at most 6 percentage points on £500,000, which is £30,000, for an owner who has not claimed the relief before. Gains above the new limit are taxed at the main rates, 24 per cent for higher-rate taxpayers in 2027-28.

Who is affected by the £500,000 limit from 6 April 2027?

Owners whose lifetime qualifying gains exceed £500,000 from 6 April 2027. HMRC's impact note of 29 October 2026 names trustees who dispose of business assets and individuals who dispose of all or part of their business or of shares in their personal company, and estimates that 75 per cent of approximately 51,000 claimants will be unaffected, leaving an estimated 13,000 individuals affected.

The same note of 29 October 2026 profiles the affected group: 81 per cent are aged 45 to 74, against 42 per cent of UK adults, and 71 per cent are men, against 49 per cent of UK adults. The profile, on those figures of 29 October 2026, is the established owner rather than the early-stage founder.

The eligibility tests do not change on 6 April 2027: on gov.uk's guidance read on 2 November 2026, a shareholder must for at least two years be an employee or office holder of a trading company in which they hold at least 5 per cent of the shares and votes, among other conditions.

The Exchequer side is small in the first year and grows. The impact note of 29 October 2026 scores the cut at £5 million in 2026-27, £60 million in 2027-28 and £305 million by 2031-32, figures certified by the Office for Budget Responsibility.

Will owners bring sales forward before 6 April 2027?

The government's own costing expects some to. The Budget 2026 policy costings of 28 October 2026 say the BADR costing "accounts for behavioural responses whereby some taxpayers may change the timing of their disposals", among other responses.

The government's response to its call for evidence on tax support for entrepreneurs, published in October 2026, records the same view from respondents: "Several respondents suggested that BADR had more influence over the timing of a sale, than the decision to sell itself."

The rules announced on 29 October 2026 narrow the obvious route. Under section 28 of the Taxation of Chargeable Gains Act 1992, an asset sold under an unconditional contract is disposed of when the contract is made, not at completion. The new rules mean an unconditional contract signed before 6 April 2027 and completed after it is held to the £500,000 limit unless the parties can show no tax-timing purpose, and where any of those exceptions is relied on and the gain exceeds £100,000, a statement must be made. The note of 29 October 2026 does not say from which date such contracts are caught; the draft legislation will.

For a solvent liquidation the mechanics differ. HMRC's Capital Gains Manual (CG64115, read 2 November 2026) treats a capital distribution in a winding-up as a disposal or part disposal of the shares, and the relief is available on it if the conditions are met. CG64115 also notes that from 6 April 2016 a distribution in a winding-up may be taxed as income instead, under a targeted anti-avoidance rule (sections 396B and 404A of the Income Tax (Trading and Other Income) Act 2005).

The Gazette carried 970 notices of a resolution for a members' voluntary winding-up in October 2026, 44.1 a working day, against 526 in September 2026 and 405 in August 2026. The weekly count ran at about 90 to 110 in late August and early September 2026, rose above 140 from the week of 21 September 2026, and reached 309 in the week of 26 to 30 October 2026, the week of the Budget. The rise began five weeks before the Budget, before the measure was announced, so the October 2026 figure cannot be attributed to it.

The sworn surplus is the company's, not any one shareholder's gain, so the October 2026 figures do not say how many owners exceed the 2027 limit. They say where to look: in October 2026, 81 declarations swore £1 million or more and 18 swore £5 million or more, and 77.4 per cent of the companies behind the notices had a current individual PSC entry.

What does the 2027 limit do to a private banker's book?

A fixed date gives an owner with qualifying gains above £500,000 a reason to act before 6 April 2027, and the professionals named on the record (the accountant who files the accounts and, in a solvent liquidation, the practitioner in The Gazette notice) are among those the owner will speak to.

Two consequences follow for a book built on owner-managed wealth, each from the facts above rather than a forecast.

• The calendar compresses. Owners who were going to sell in 2027 or 2028 and can complete before 6 April 2027 have a quantified reason to, worth up to £30,000 each for a higher-rate gain of £1 million or more on the 2026-27 rules against the 2027-28 rules, for an owner who has not claimed the relief before.
• The route in is professional. The person who knows of a pre-April sale first is a professional who is named, filing by filing, on the public record; the solvent liquidation notice names its practitioner, which is why the members' voluntary liquidation signal matters more in the months before April 2027.

In the house's experience a private banker usually hears of an owner's sale too late, after it has been announced; the dated events on the public record are the way to hear sooner.

In the electronically filed accounts the house held on 2 November 2026, 78,041 active, non-dormant companies with a current individual PSC entry reported net assets of £500,000 to under £1 million on their latest accounts for a period ending in 2024 or later, and 104,005 reported £1 million or more; companies filing on paper are largely absent, so these are floors. Net assets are not a sale price and a company is not one owner's gain, so these are the population in which the lower limit matters, not a count of affected disposals.

How does business asset disposal relief sit beside Founders' Relief?

Founders' Relief, announced the same day, is a separate and far narrower relief: a 10 per cent rate on up to £10 million of lifetime gains from 6 April 2027, under technical consultation until 30 November 2026, which HMRC expected on 29 October 2026 to reach approximately 600 individuals a year.

The rates annex of 28 October 2026 says any BADR or Investors' Relief claimed from 6 April 2027 reduces the Founders' Relief limit available; the proposed tests are read in Founders' Relief on the consultation text.

Frequently asked questions

When does the £500,000 business asset disposal relief limit start?

The £500,000 limit applies to qualifying disposals made on or after 6 April 2027, on HMRC's impact note of 29 October 2026. Disposals before that date use the £1 million limit, subject to the new rules for unconditional contracts made before 6 April 2027 and completed after it. The change will be legislated in Finance Bill 2026-27.

Does the business asset disposal relief rate change in April 2027?

No. The relief's rate is 18 per cent for disposals from 6 April 2026, and Budget 2026's rates annex of 28 October 2026 keeps it at 18 per cent in the 2027-28 tax year. Only the lifetime limit changes, from £1 million to £500,000 from 6 April 2027.

Can an owner sign a contract before 6 April 2027 and complete later?

Not safely on that alone. Under rules announced on 29 October 2026, an unconditional contract made before 6 April 2027 and completed after it is held to the £500,000 limit unless the parties show they did not enter it to gain a tax advantage from the contract-date rule, or, if connected, that it was wholly commercial. Whether a particular contract qualifies is a question for the owner's tax adviser.

How many people does the business asset disposal relief cut affect?

HMRC estimated on 29 October 2026 that about 13,000 individuals will be affected, out of approximately 51,000 claimants, with 75 per cent unaffected. On the same note of 29 October 2026, 81 per cent of those affected are aged 45 to 74 and 71 per cent are men.

Should an owner sell before 6 April 2027?

That is the owner's decision with their tax adviser, and this page does not advise on it. The facts are that the relief's limit halves for disposals from 6 April 2027, the rate stays at 18 per cent, and the Budget 2026 costings of 28 October 2026 assume some owners will move their timing.

Method

Tax facts are quoted from the primary documents published with Budget 2026 on 28 and 29 October 2026 and from gov.uk and HMRC guidance read on 2 November 2026; nothing here is tax advice, and the measure is announced, not enacted, as at 2 November 2026. The house's figures are counts of The Gazette notices with code 2431 and of declarations of solvency the house read, by month of publication or filing, measured on 2 November 2026 with measure-ledger.ts; sworn surpluses are per company, never summed and never read as one shareholder's gain. The net-asset counts come from measure-research-counts.ts, run on 2 November 2026 over the electronically filed accounts the house held (latest accounts for a period ending in 2024 or later, active non-dormant companies with a current individual PSC entry); companies filing on paper, including many full and group accounts, are largely absent, so each count is a floor.

Sources

• HMRC, "Capital Gains Tax: new Business Asset Disposal Relief lifetime limit", tax information and impact note, published 29 October 2026, read 2 November 2026: https://www.gov.uk/government/publications/capital-gains-tax-reduction-in-the-business-asset-disposal-relief-lifetime-limit/capital-gains-tax-new-business-asset-disposal-relief-lifetime-limit
• HM Treasury, "Budget 2026: overview of tax legislation and rates", paragraph 1.33, 28 October 2026, read 2 November 2026: https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/budget-2026-overview-of-tax-legislation-and-rates-ootlar
• HM Treasury, "Budget 2026: overview of tax legislation and rates, Annex A: rates and allowances", 28 October 2026, read 2 November 2026: https://www.gov.uk/government/publications/budget-2026-overview-of-tax-legislation-and-rates-ootlar/annex-a-rates-and-allowances
• HM Treasury, "Budget 2026 Policy Costings", October 2026, read 2 November 2026: https://assets.publishing.service.gov.uk/media/6ae1883fe4367e5c8b0467df/AB26_Policy_Costing.pdf
• HM Treasury, "Budget 2026 speech", 28 October 2026, read 2 November 2026: https://www.gov.uk/government/speeches/budget-2026-speech
• HM Treasury, "Government response to the Tax Support for Entrepreneurship: Call for Evidence", October 2026, read 2 November 2026: https://assets.publishing.service.gov.uk/media/6ae3569c976f73ef5cfb6847/Government_response_to_the_Tax_Support_for_Entrepreneurship.pdf
• gov.uk, "Business Asset Disposal Relief", read 2 November 2026: https://www.gov.uk/business-asset-disposal-relief
• HMRC, Capital Gains Manual, CG64115, read 2 November 2026: https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg64115
• Income Tax (Trading and Other Income) Act 2005, sections 396B and 404A, read 2 November 2026: https://www.legislation.gov.uk/ukpga/2005/5/section/396B and https://www.legislation.gov.uk/ukpga/2005/5/section/404A
• Taxation of Chargeable Gains Act 1992, section 28, read 2 November 2026: https://www.legislation.gov.uk/ukpga/1992/12/section/28
• The Gazette, notices with code 2431, August to October 2026, and Companies House declarations of solvency (form LIQ01) and the register of people with significant control, measured 2 November 2026.