Business Asset Disposal Relief (BADR)

BADR is a tax relief designed to encourage entrepreneurship and reward business owners when they sell or dispose of their business assets. It allows eligible individuals to pay a lower rate of Capital Gains Tax (CGT) on the profits they make from selling qualifying business assets.

Under BADR, if you meet the criteria, you can benefit from a reduced CGT rate of 10% on qualifying gains, as opposed to the standard CGT rate, which can be as high as 20%. The relief applies to the disposal of business assets such as shares in a company, interests in a partnership, or assets used in a business.

To be eligible for BADR, you must meet certain conditions, such as being an individual (not a company) and having owned the business assets for at least two years before the sale or disposal. There are also additional requirements related to your involvement in the business and the type of assets being sold.

It’s worth noting that there are limits on the total amount of qualifying gains that can benefit from BADR. In the UK tax year 2021/2022, the lifetime limit for BADR is £1 million. Any gains above this limit would be subject to the standard CGT rates.

We can provide personalized advice based on your specific circumstances and the current tax regulations in the UK.

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