In 2024, the main rates of Capital Gains Tax (CGT) increased for disposals taking place on or after 30 October 2024 (now 18% and 24%). It was also announced that the CGT rate on Business Asset Disposal Relief (BADR) gains will rise from 10% to 14% from 6 April 2025, with a further increase to 18% planned from 6 April 2026. These upcoming changes mean that mistiming a BADR-qualifying disposal could result in a higher CGT liability.

As a general rule, for CGT purposes, the disposal date for unconditional contracts is when the contract is entered into, rather than when it is completed. However, new rules prevent the use of unconditional contracts to secure lower CGT rates. Additionally, there are new rules restricting the use of elections to lock in a lower CGT rate when share exchanges or reorganisations occur.

If you are considering a BADR-qualifying disposal, please get in touch so that we can help you navigate these changes and avoid potential pitfalls.