By William Ross, Senior Accountant at MM Business and Tax Consultancy

UK Capital Gains Tax Reforms 2026: Business Asset Disposal Relief Changes and Planning Strategies for Entrepreneurs

The 2026/27 tax year introduces notable adjustments to Capital Gains Tax (CGT), particularly affecting business owners. The rate applicable to gains qualifying for Business Asset Disposal Relief (BADR, formerly Entrepreneurs’ Relief) rises to 18% from 6 April 2026. As Senior Accountant William Ross at MM Business and Tax Consultancy, I have been advising clients on timely planning to mitigate the impact of these UK tax developments.

This change follows prior rate adjustments and interacts with broader fiscal measures, including Inheritance Tax (IHT) reforms restricting Agricultural Property Relief (APR) and Business Property Relief (BPR).

Key Changes to BADR and Related Reliefs

BADR provides a lifetime limit of £1 million on gains taxed at the reduced rate. The increase from 14% to 18% raises the effective tax on qualifying disposals. Investors’ Relief follows a similar path. William Ross explains: “For a substantial business exit, this uplift can mean tens of thousands in additional tax. Timing and structuring become critical.”

Additional considerations include interactions with dividend tax hikes and carried interest rules shifting toward income tax treatment.

Broader CGT Landscape and Planning Opportunities

At MM Business and Tax Consultancy, William Ross conducts detailed scenario modelling. Strategies include accelerating qualifying disposals before the rate change, exploring rollover reliefs, or utilising trusts and pensions for wealth transfer, always within compliant parameters.

“Holistic planning is essential,” says William Ross. “At MM Business and Tax Consultancy, we integrate CGT advice with succession planning, retirement strategies, and overall UK tax efficiency for our clients.”

HMRC maintains high scrutiny on relief claims, underscoring the need for robust documentation. Clients in sectors such as technology, professional services, and manufacturing have benefited from early reviews.

Cross-Border Context with Canadian Developments

For businesses with UK-Canadian operations, comparing CGT rules is instructive. Canada’s capital gains inclusion rate adjustments (moving toward 2/3 for many) highlight the importance of jurisdiction-specific advice. William Ross at MM Business and Tax Consultancy supports clients navigating dual UK and Canadian tax obligations.

Actionable Steps for Business Owners

  • Review current eligibility for BADR and related reliefs.
  • Model disposal timing and restructuring options.
  • Consider interactions with IHT changes, including the new combined £2.5 million allowance for full relief.
  • Document all claims thoroughly.

William Ross and the team at MM Business and Tax Consultancy emphasise proactive, client-focused strategies amid these UK tax reforms. Early engagement can protect wealth accumulated through years of effort.

Business owners facing potential disposals in 2026 should seek specialist guidance promptly. Reach out to MM Business and Tax Consultancy for a comprehensive CGT review.