The BADR rate goes up in April. What does that actually mean for your sale?

If you're a business owner thinking about selling, you've probably seen the headlines. Business Asset Disposal Relief goes from 14% to 18% on 6 April 2026. On a qualifying gain of £1 million, that's an extra £40,000 in tax. It's real money, and it's understandably focusing minds.

I've had more conversations about this in the past two months than almost any other topic. So I want to share what I'm telling clients, not as tax advice (I'm a broker, not a tax advisor), but as someone who sees how these changes affect real transactions.

The deadline is closer than it looks

Six weeks sounds like enough time to get a deal done. It isn't. If you haven't already exchanged contracts, the chances of completing a business sale before 6 April are slim. Due diligence alone typically takes four to eight weeks, and that's before you factor in legal drafting, pension reviews, lease assignments, and the dozen other things that need to happen before completion.

What matters for BADR is the completion date, not when you first shook hands with a buyer. Anti-forestalling rules mean you can't simply sign a contract early and complete later to lock in the lower rate. HMRC has been clear about this.

So if you're not already mid-transaction, the 14% window has probably closed. That's not a reason to panic. It's a reason to think clearly about what comes next.

18% is still a significant relief

It's worth keeping perspective. The standard Capital Gains Tax rate for higher-rate taxpayers is 24%. BADR at 18% still saves you £60,000 on a £1 million gain compared to paying the full rate. It's less generous than it was, but it's far from gone.

The lifetime limit also remains at £1 million of qualifying gains. For most business owners selling a single business, the full gain will fall within that limit. Above it, you're paying 24% regardless.

The more interesting question is what this means for deal structure

Where I've seen the BADR change make a real difference isn't in whether people sell, but in how deals are structured and negotiated.

Here's one example. If you're in advanced discussions with a buyer and completion is realistically possible before April, there may be a case for offering a modest price adjustment to incentivise the buyer to move faster. If closing before the deadline saves you £40,000 in tax, offering £10,000 or £15,000 off the purchase price to make it happen still leaves you meaningfully better off. The buyer gets a small discount. You keep more of the proceeds after tax. Both sides win.

That's the kind of practical thinking that gets lost in the headline panic about tax rises. It's not about rushing a sale. It's about structuring a deal intelligently when the timing works.

For transactions that will complete after April, the BADR change should be factored into your financial planning from the outset. Your accountant can model the after-tax position at 18% and help you understand what the sale needs to achieve to meet your personal objectives. Starting from that number, rather than being surprised by it later, makes for a much calmer process.

Don't let the tax tail wag the dog

The biggest risk I see right now is owners making bad decisions because of the tax calendar. Rushing a sale to hit a deadline, accepting a lower price from the wrong buyer, or going to market before the business is properly prepared. All of these cost more in the long run than the 4% increase in BADR.

A well-prepared business, sold through a competitive process to the right buyer, will almost always achieve a better net outcome than a rushed sale that saves a few points on CGT. I've seen it too many times: owners who left £100,000 or more on the table because they optimised for tax rather than for value.

If you're thinking about selling in 2026, the right approach is to start preparing now, get your financials clean, address any regulatory or operational issues, and plan for a process that takes six to nine months. If that means completing in the second half of the year at 18%, so be it. You'll almost certainly end up with more money in your pocket than if you'd scrambled to close a deal at 14% with a buyer who knew you were under time pressure.

What I'd actually do

Talk to your accountant about your specific BADR position before you talk to anyone else. Make sure you understand your lifetime allowance, your qualifying conditions, and your after-tax target. Then, when you're ready to have a conversation about selling, you'll be making decisions based on your numbers rather than on headlines.

If you'd like to talk through how this fits into your situation, I'm always happy to have a confidential conversation. And our valuation calculator can give you a starting point for understanding what your business might be worth in the current market.

This article reflects conversations I'm having with clients and is not intended as tax advice. Always consult a qualified accountant or tax adviser about your specific circumstances.