What is the current rate of Business Asset Disposal Relief?

18%, on qualifying disposals completing on or after 6 April 2026, against a main capital gains rate of 24% on business disposals. The lifetime limit is £1m of qualifying gains and the two-year qualifying conditions are unchanged. The completion date, rather than the date terms are agreed, decides which rate applies.

Have I missed the chance to sell at a lower rate?

The earlier rates have gone, but the question is the wrong way round. What you would have saved by completing before this month is capped at a few tens of thousands of pounds, and a sale rushed to hit a date typically costs more than that in price. If the business was not ready, completing in March would have been the expensive option rather than the clever one.

How much is the relief actually worth now?

Up to £60,000 on a full £1m gain, being the six percentage point difference against the main rate. Above the lifetime limit the main rate applies, so on a larger disposal the saving is a fixed amount rather than a proportion of the price.

Does the inheritance tax change affect me if I am selling?

Only indirectly, but it affects the choice between selling and holding. Business property relief is now capped at £2.5m of combined business and agricultural assets for full relief, with partial relief above, so holding a valuable business into an estate now carries a cost it did not carry before. That is a conversation for your own adviser, and it is more useful with a real valuation in hand.

The New Rate and What It Means for FM Owners

The PositionWhere the rate now stands, stated plainly

Business Asset Disposal Relief has been 18% since 6 April 2026. It was 14% from 6 April 2025, and 10% before that, and both steps were announced together at the Autumn Budget on 30 October 2024, so neither arrived unexpectedly. The lifetime limit remains £1m of qualifying gains.

The conditions have not changed. The company must be a trading company, and you must have held at least 5% of the ordinary share capital and voting rights, and been an officer or employee, throughout the two years ending on the disposal. The rate that applies is fixed by the completion date, not by the day terms are agreed.

The comparison that matters is with the main rate of capital gains tax on business disposals, which is 24%. The relief is narrower than it was and it is still a relief, and the direction of travel over two Budgets has been towards the main rate rather than away from it. That is a fact to plan with, not a reason to act this quarter.

The ArithmeticWhat the change is actually worth on a disposal

On a gain of £1m, the full lifetime allowance, the relief saves six percentage points against the main rate, which is £60,000. That is real money and it is also a smaller number than most owners expect, because the relief is capped and the cap has not moved while business values have.

Above the lifetime limit the rate is the main rate regardless, so on a larger disposal the relief is a fixed benefit rather than a proportional one. An owner selling a facilities management business for several million pounds is planning around a known maximum saving, not around a percentage of the whole price. Where there is more than one shareholder, each qualifying individual has their own lifetime limit, which is worth establishing early rather than assuming.

Set that against what moves an FM valuation. Half a turn on the multiple, on a business making a million pounds of adjusted EBITDA, is five hundred thousand pounds. Contract term at completion, renewal history, self-delivery and concentration each move the multiple by more than half a turn, which is the argument for spending the next year on the business rather than on the calendar.

Half a turn on the multiple, on a business making a million pounds of adjusted EBITDA, is five hundred thousand pounds.

£60,000

Maximum relief on a full £1m gain against the 24% main rate

The Other ChangeThe change that affects owners who intend to hold

There is a second change in force this month and it points the other way. Business property relief, which allowed qualifying business assets to pass free of inheritance tax, is now capped: full relief applies to the first £2.5m of combined business and agricultural assets, with partial relief above that. The allowance is transferable between spouses and civil partners.

That cap was originally announced at a lower figure and raised to £2.5m on 23 December 2025, so commentary published before that date still refers to the smaller allowance. It is worth checking the date on anything you read about it.

If the plan was always to hand the business on rather than sell it, the arithmetic of holding has moved in the same month as the arithmetic of selling. Neither is a reason to do anything quickly. Both are reasons to have one conversation with your own tax adviser this year rather than next, with an actual valuation in front of you instead of an estimate. Selling and holding are the same question asked from opposite ends.

Worth Knowing Either Way

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