When an individual disposes of an asset at a gain, capital gains tax may be due. Ordinarily, for gains falling above the higher-rate threshold, this will be charged at a rate of 20%. However, if business asset disposal relief (BADR) (known as entrepreneurs’ relief prior to 6 April 2020) is available, the rate will be reduced to 10%.
BADR is applicable where individuals or trustees make “qualifying business disposals”, and can be claimed in respect of gains up to the individual’s “lifetime limit”.
Download our BADR flyer for more information.