If you’re a UK business owner thinking about selling your business, shares or other valuable assets, Capital Gains Tax is something you need to consider early.
It can be easy to focus on the sale price and forget about what happens after the transaction. But depending on what you’re selling, how the sale is structured and which tax reliefs you qualify for, the amount you actually keep can be very different from the headline figure.
With the Capital Gains Tax rules changing in recent years, 2026 is a good time to review your position.
What is Capital Gains Tax?
Capital Gains Tax, or CGT, is a tax on the profit you make when you sell or dispose of an asset that has increased in value.
For business owners, this could apply when you:
- Sell your business
- Sell shares in your company
- Sell a business property
- Dispose of certain business assets
- Transfer assets in certain circumstances
It’s the gain that is generally subject to tax, rather than the full amount you receive from the sale.
What are the Capital Gains Tax rates in 2026?
For individuals, the main Capital Gains Tax rates for the 2026/27 tax year are 18% and 24%.
The rate that applies to you can depend on your taxable income and the size of your gain.
For business owners, however, there is another important consideration: Business Asset Disposal Relief.
This can allow qualifying business gains to be taxed at a lower rate than the standard CGT rates.
What is Business Asset Disposal Relief?
Business Asset Disposal Relief, often referred to as BADR, can be particularly valuable if you’re selling a business you’ve spent years building.
From 6th April 2026, qualifying gains under BADR are taxed at 18%.
However, simply owning and selling a business doesn’t automatically mean you’ll qualify.
There are specific conditions that need to be met, including rules around how long you’ve owned the business or shares and, depending on the circumstances, your involvement in the business.
This is one of the reasons it’s important to check your position well before a sale.
If you’re thinking about selling your business in the next few years, don’t wait until you’ve found a buyer to ask whether you qualify for BADR.
The £3,000 Capital Gains Tax allowance
The annual exempt amount for Capital Gains Tax is currently £3,000 for individuals.
In simple terms, this means you can make up to £3,000 of taxable capital gains in a tax year before CGT becomes payable.
For someone selling a business for a substantial amount, though, this allowance is unlikely to make a significant difference to the overall tax bill.
The more important questions are usually around the structure of the sale, the size of the gain and whether you qualify for any relevant tax reliefs.
How much Capital Gains Tax could you pay when selling a business?
Let’s take a simple example.
Imagine you sell your business and, after taking account of the relevant costs and adjustments, you have a qualifying gain of £500,000.
If the full gain qualifies for Business Asset Disposal Relief and you have sufficient available relief, an 18% rate would produce a tax bill of around:
£500,000 × 18% = £90,000
That’s a significant amount of money.
And if your gain doesn’t qualify for BADR, the standard CGT rates could result in a different tax liability depending on your wider income and circumstances.
This is why understanding your tax position before agreeing the terms of a sale can be so important.
Don’t wait until you’ve sold the business
One of the biggest mistakes business owners can make is leaving tax planning until the transaction is almost complete.
By that point, important decisions may already have been made.
For example, there can be major tax differences between selling shares in a company and selling the underlying business assets.
The buyer may have a preference for one structure, while the seller may prefer another. The tax consequences need to form part of that conversation.
There may also be other reliefs worth considering depending on your circumstances, including Business Asset Rollover Relief, Incorporation Relief or Gift Hold-Over Relief.
The right approach will depend on the specific transaction.
What should you do before selling your business?
If a business sale is on the horizon, it’s worth starting your tax planning well in advance.
Here are some of the areas to look at.
1. Work out your potential gain
Understanding what you originally paid for the asset or shares, what you’re likely to receive and which costs may be allowable gives you a starting point for estimating your potential CGT liability.
2. Check whether you qualify for BADR
Don’t assume that you qualify simply because you’re selling your own company.
The rules are specific, so your circumstances should be reviewed before you commit to the transaction.
3. Consider how the sale is structured
A share sale and an asset sale can have very different tax consequences.
It’s worth understanding the implications of both before agreeing the structure of the deal.
4. Think about timing
The date of disposal can affect which tax rules and rates apply.
If you’re already planning an exit, timing should be considered alongside the commercial aspects of the transaction.
5. Look at your wider financial position
Selling a business can have consequences beyond CGT.
You may need to consider your income, other capital gains, investments, retirement plans and what you intend to do with the proceeds.
What if you’re planning to sell your company?
If you own shares in a limited company, you may be able to claim Business Asset Disposal Relief when you sell those shares, provided you meet the relevant conditions.
Those conditions include requirements relating to the company, your shareholding and your involvement in the business.
This is particularly important for owner-managed businesses.
If you’re considering a sale in the next year or two, reviewing these conditions now can give you time to address potential issues before they become a problem.
Capital Gains Tax is only part of the bigger picture
Selling a business is one of the biggest financial decisions many business owners will make.
It’s therefore worth looking beyond the immediate tax bill.
You should also think about:
- The amount you’ll actually receive after tax
- Whether you’re selling shares or assets
- The timing of the transaction
- What happens to money retained in the company
- Your plans after the sale
- Whether you’re retiring or starting another venture
- How the proceeds fit into your longer-term financial plans
The sale price is only one part of the equation.
Planning to sell your business?
If you’re considering selling your business, shares or significant business assets, it’s worth getting the tax conversation started before the deal is agreed.
Good planning can help you understand your potential Capital Gains Tax liability, identify relevant reliefs and make better-informed decisions about the structure and timing of your exit.
At Future Cloud, we don’t believe tax planning should start after you’ve sold your business.
It should be part of the conversation from the beginning.
If you’re thinking about selling your business, speak to Future Cloud before you make any major decisions.
This article provides general information for UK business owners and reflects the Capital Gains Tax rules applicable from 6th April 2026 based on current HMRC guidance. Tax legislation can change and the rules applying to your circumstances may be different. Professional advice should be taken before entering into a transaction.
Get in touch with our team today to find out how we can support you!
info@future-cloud.co.uk
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