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This guidance note discusses the application of business asset disposal relief (BADR) for partners only. BADR is a capital gains tax relief which reduces the rate of tax on qualifying gains to 10%.

The rate of BADR will increase to 14% for disposals made on or after 6 April 2025, and from 14% to 18% for disposals made on or after 6 April 2026.  

There are anti-forestalling rules which will apply due to the changes in general CGT rates from 30 October 2024 and the phased changes in BADR rates from 6 April 2025. For details see the Conditions for business asset disposal relief guidance note.

BADR relief is available for individuals whether they operate as a sole trader, in partnership or through their personal company. Companies cannot claim BADR. There is a lifetime limit on BADR of £1m of total capital gains.

The rules for sole traders are the same as those for partners and there is more detail in the Conditions for business asset disposal relief guidance note. The commentary below sets