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Capital Gains Tax for businesses: what sole traders and partners need to know

Business owners · Capital Gains Tax

Capital Gains Tax for businesses: what sole traders and partners need to know

If you sell, give away or close down part of your business, you may have a Capital Gains Tax bill, even on things you have never thought of as assets, such as your reputation. Four main reliefs can cut or delay that tax.

SRBy Stephen ReynoldUpdated 12 November 20263 min read
New business owner serving a customer at the counter of a small shop
In 30 seconds
  • Sole traders and partners pay Capital Gains Tax on gains from business assets.
  • Limited companies pay Corporation Tax on their gains instead.
  • Business assets include property, plant, shares, trademarks and goodwill.
  • Four reliefs can help: Business Asset Disposal, Rollover, Gift Hold-Over and Incorporation Relief.
  • 2026/27 rates are 18% and 24%, or 18% with Business Asset Disposal Relief.

This guide is the starting point for sole traders and partners. It explains what counts, who pays and which relief fits which situation, with links to our detailed guides.

Limited companies pay Corporation Tax on their gains instead, so the rules here are mainly for unincorporated businesses and their owners.

Who pays?

According to GOV.UK, you may pay Capital Gains Tax if you make a gain when you sell or dispose of all or part of a business asset. Self-employed sole traders and business partners pay Capital Gains Tax. Limited companies pay Corporation Tax on gains from selling their assets instead.

What counts as a business asset?

  • land and buildings
  • fixtures and fittings
  • plant and machinery
  • shares
  • registered trademarks
  • your business’s reputation, known as goodwill

Gifts to your husband, wife, civil partner or a charity are usually free of the tax.

2026/27 rates

After the £3,000 annual exempt amount, gains are taxed at 18% within your unused basic rate band and 24% above it. Gains qualifying for Business Asset Disposal Relief are taxed at 18%.

Estimate your gain

Use our free Capital Gains Tax calculator to see what a sale might cost.

Try the calculator

Which relief fits your situation?

Selling or closing your business

Business Asset Disposal Relief can tax qualifying gains at 18%, up to a £1 million lifetime limit, if you meet the two-year conditions.

Selling assets and buying new ones

Rollover Relief can delay the tax if you reinvest in new business assets within the time window.

Giving assets to family

Gift Hold-Over Relief can pass the gain to the person receiving the gift.

Moving into a limited company

Incorporation Relief can delay the tax until you sell your shares.

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 4179

Reporting the gain

Most business gains are reported on your Self Assessment return for the tax year of the disposal, along with any relief claims. If the asset is UK residential property, the 60-day rule may apply. Read our guide to reporting and paying Capital Gains Tax.

Missed a gain in the past?

If you sold business premises, equipment or goodwill in an earlier year and did not report the gain, put it right before HMRC asks. See our guide to unreported gains and disclosures and our Capital Gains Tax service.

What should I do next?

List what you are selling or giving

Property, equipment, goodwill or shares.

Check the reliefs

Disposal, Rollover, Gift Hold-Over or Incorporation Relief.

Get the gain calculated

Including all costs and the correct base value.

Ask us before you act

Timing can decide which relief you get.

Frequently Asked Questions

Do limited companies pay Capital Gains Tax?

No. Limited companies pay Corporation Tax on gains from selling their assets.

Is goodwill a business asset?

Yes. Your business’s reputation, or goodwill, is treated as a business asset.

What are the business Capital Gains Tax rates for 2026/27?

18% within your unused basic rate band and 24% above it, or 18% for gains that qualify for Business Asset Disposal Relief.

Can more than one relief apply?

Sometimes. The best combination depends on whether you are selling, reinvesting, gifting or incorporating.

How do I report a business gain?

Usually on your Self Assessment return for the tax year of the disposal, with any relief claims.

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.

SR

About the Author

Stephen Reynold
I’m Stephen Reynold, an accountant at Wingate Accountants. I work with sole traders and small companies, turning tax rules into clear, practical next steps.

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