BADR Tax

BADR stands for Business Asset Disposal Relief tax. It was previously known as Entrepreneurs’ Relief and is a form of Capital Gains Tax relief. BADR encourages business investment and growth by offering valuable tax relief when you sell or dispose of a business asset. BADR reduces the Capital Gains Tax rate from 20% to 10% and has a lifetime limit of £1 million. You could potentially save up to £100,000 in tax per year.

How do I know if I’m eligible for BADR?

You can be eligible if you are:

  • An individual looking to dispose of their personal business or shares in a business partnership.
  • A director or employee selling shares of a company you work for.

Companies and investors are not eligible for BADR. To qualify for the relief when selling your business, you must be a sole trader or business partner and have owned the business for a minimum of 2 years. If you’re selling shares, you must be an employee or office holder within a company that trades, rather than invests.

Business Asset Disposal Relief has a deadline of 31st January of the year after the tax year ends. If you have any queries about BADR, get in touch with our experts today for comprehensive advice about the savings and relief you may be entitled to.

 

Frequently Asked Questions

  • When does the tax year end?

    The tax year runs from 6th April until the following 5th April. If you dispose of your asset on 3rd March 2024, you have until 31st January 2025 to make a claim. If you dispose of your asset on 2nd July 2024 (the following tax year), you have until 31st January 2026 to make a claim.

  • I’m confused about BADR and how to claim it… help!

    First, don’t panic about BADR claims, you aren’t alone! Our experts are on hand to support you every step of the way, so get in touch today for comprehensive support and advice.

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