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GLOSSARY

Business asset disposal relief (BADR), previously entrepreneurs' relief definition

ˈbɪznɪs ˈæsɛt dɪsˈpəʊzəl rɪˈliːf
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What does Business asset disposal relief (BADR), previously entrepreneurs' relief mean?

Business asset disposal relief applies a reduced rate of capital gains tax (CGT) of 10% to gains (up to a lifetime limit of £1m) on disposals of certain business assets by individuals and, in some cases, trustees if the qualifying conditions are met. It is not available to companies.

The individual can be trading as a sole trader, in partnership, or through a company.

The main disposals qualifying for relief are:
• the disposal of the whole or part of a business owned for at least two years before disposal
• the disposal of assets that were used in that business when it ceased provided the assets were disposed of within three years of cessation
• the disposal of shares or securities in the company provided it was the individual’s personal company (as defined) for two years up to the date of disposal

EMI shares can also qualify for relief.

Additionally where a disposal of shares or of an interest in the assets of a partnership qualifies for relief an associated disposal of assets owned by the individual and used

Discover our 4 Tax Guidance on Business asset disposal relief (BADR), previously entrepreneurs' relief

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