Budget 2026 announced that the Business Asset Disposal Relief lifetime limit falls from £1 million to £500,000 for disposals on or after 6 April 2027. On a £1 million gain that adds £30,000 of tax.
HMRC's tax information and impact note, published on 29 October 2026, says the lifetime limit "will be reduced from £1 million to £500,000 for qualifying disposals made on or after 6 April 2027". The change was announced at Budget 2026 and is not yet law. HMRC estimates about 13,000 of roughly 51,000 claimants will be affected.
£1,000,000 at 18%
£180,000£500,000 at 18% is £90,000
£500,000 at 24% is £120,000
For a share sale, the seller must for at least 2 years before the sale be an employee or office holder of a trading company in which they hold at least 5% of the shares and voting rights. The relief rate is 18% for disposals from 6 April 2026. Gains above the lifetime limit are taxed at the normal rates: 24% for higher and additional rate taxpayers.
The note says anti-forestalling rules will apply to unconditional contracts entered into before 6 April 2027 that have not completed by then. Gains under those contracts are subject to the £500,000 limit unless the parties can show they did not enter the contract to obtain a tax advantage.
A buyer of a care home or nursery that is a new legal entity must be registered with CQC or Ofsted before it provides care, so the registration timetable and the tax date are planned together.
We work out the tax on the sale, check that the relief conditions are met, and plan the timetable with your solicitor. More on buying or selling a care business.
No. It was announced at Budget 2026 on 29 October 2026 and applies to disposals on or after 6 April 2027 once legislated.
18% for disposals from 6 April 2026. It was 14% from 6 April 2025 to 5 April 2026, and 10% before that.
The buyer's and seller's CQC applications and the completion date.
Ofsted registration for the buyer, and the seller's responsibility until it resigns.
AIA, full expensing, the pools and the 3% building allowance for care homes.
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