by Asim Abbas
12 November 2026 
Business Asset Disposal Relief in 2026/27: the rate is now 18%, so do you still qualify?
Business Asset Disposal Relief in 2026/27: the rate is now 18%, so do you still qualify?
Business Asset Disposal Relief, once called Entrepreneurs’ Relief, has risen from 10% to 18% in two years. It still saves tax for some higher rate taxpayers, but only if you meet strict two-year conditions.
- The rate is 18% for disposals from 6 April 2026 (14% in 2025/26 and 10% before).
- Sole traders and partners need two years of ownership and trading up to the sale.
- Shareholders need two years as an employee or officer and a 5% personal company stake.
- Assets must be sold within 3 years if you close the business.
- There is a £1 million lifetime limit on gains that qualify.
If you are selling or closing your business, or selling shares in your own company, the timing and the conditions matter.
This guide explains the rates, who qualifies and the mistakes that can cost you the relief.
The rates
According to GOV.UK, qualifying gains are taxed at:
- 10% for disposals on or before 5 April 2025
- 14% for disposals between 6 April 2025 and 5 April 2026
- 18% for disposals from 6 April 2026
Gains that qualify count towards a £1 million lifetime limit. Without the relief, gains are taxed at 18% within your basic rate band and 24% above it in 2026/27. So the relief now mainly helps if you are a higher or additional rate taxpayer.
Sole traders and partners
If you sell all or part of your business, you must have been a sole trader or partner, and owned the business, for at least two years up to the date of sale. The same applies if you close the business, but you must dispose of the business assets within three years to qualify.
Selling shares in your company
For at least two years up to the sale:
- you must be an employee or office holder, such as a director, of the company or a company in the same group
- the company must be mainly trading, not investing, or be the holding company of a trading group
- it must be your personal company: at least 5% of the shares and voting rights, plus at least 5% of distributable profits and assets on winding up, or of sale proceeds
If the company stops trading, you can still qualify if you sell your shares within three years. Different two-year rules apply to EMI shares.
Estimate the tax on a sale
Use our free Capital Gains Tax calculator to compare your options.
If your shareholding falls below 5%
If new shares are issued and your holding drops below 5%, you can elect to be treated as having sold and bought back your shares just before the new issue. That locks in relief on the gain up to that point, and you can choose to postpone the tax until you actually sell.
Assets you lent to the business
If you own an asset, such as premises, that your business or company uses, you may also qualify when you sell it, provided you also sell at least 5% of your partnership share or personal company shares, and the asset was used by the business for at least a year.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Common mistakes
- selling a few weeks before the two-year anniversary
- a company holding too much cash or investments, so it no longer counts as trading
- closing a business and selling the assets more than three years later
- a shareholding diluted below 5% without an election
For the wider tax picture when you sell, read our guide to selling your business and our guide to Capital Gains Tax for businesses. If you are moving your business into a company rather than selling it, see Incorporation Relief.
What should I do next?
Ownership, trading and employment or office-holder dates.
Too much cash or investments can count against you.
The rate and your income band both affect the saving.
We confirm qualification and calculate the tax.
Frequently Asked Questions
What is the Business Asset Disposal Relief rate for 2026/27?
18% for disposals from 6 April 2026.
Is it worth claiming at 18%?
It still saves tax where the gain would otherwise fall in the 24% band. For basic rate taxpayers the saving may be small or nothing.
How long do I need to have owned the business?
At least two years up to the date of sale, as a sole trader, partner or, for shares, as an employee or officer with a 5% personal company stake.
What is the lifetime limit?
£1 million of qualifying gains over your lifetime.
Can I claim if I close my business?
Yes, if you meet the two-year conditions and dispose of the business assets within three years.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Asim Abbas
I’m Asim Abbas, founder of Wingate Accountants and a Chartered Certified Accountant. I help sole traders, landlords and directors stay on top of their tax with fixed fees and plain-English advice.
