Small Business Accountants

How do I claim entrepreneurs relief?

Business Asset Disposal Relief, previously called Entrepreneurs' Relief, reduces the Capital Gains Tax rate on qualifying business disposals. You claim it through the Capital Gains Summary section of your Self Assessment tax return. The CGT rate is currently 14% from April 2025 and will rise to 18% from April 2026. A lifetime limit of one million pounds applies to total qualifying gains.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 1

How do I claim entrepreneurs relief? - GoForma Tax Guides | UK Accountants & Tax Advisors

Key takeaways

Entrepreneurs' Relief was renamed to Business Asset Disposal Relief from 6 April 2020. The qualifying rules remain largely the same, but the lifetime limit was reduced to one million pounds.
The CGT rate under BADR was 10% until April 2025. It rose to 14% from 6 April 2025 and will increase again to 18% from 6 April 2026, following the Autumn Budget 2024 announcement.
The lifetime limit for Business Asset Disposal Relief is £1 million per individual, reduced from £10 million in March 2020. Spouses each have their own separate £1 million allowance.
You must own at least 5% of the company shares and voting rights for a minimum of two years before disposal and be an employee or officer of that company throughout the qualifying period.
You claim the relief through the Capital Gains Summary pages of your Self Assessment tax return. You should discuss complex disposals involving non-share assets with a qualified accountant.

You can claim Entrepreneurs' Relief on your annual Self Assessment tax return, under the 'Capital Gains Summary' section.

It is also possible to claim the relief on the sale of other assets which are not shares. The rules on this are different and it is best to discuss your individual case with a qualified accountant.

Frequently asked questions

What is Business Asset Disposal Relief?

Business Asset Disposal Relief, formerly known as Entrepreneurs' Relief, is a Capital Gains Tax relief that reduces the rate you pay when selling qualifying business assets. It was introduced to encourage business ownership by offering a lower CGT rate on eligible disposals. The relief applies to shares in trading companies, sole trader businesses, and certain partnership assets, provided you meet the ownership and employment conditions set by HMRC.

Why was Entrepreneurs' Relief renamed?

The government renamed Entrepreneurs' Relief to Business Asset Disposal Relief from 6 April 2020. The change was made alongside a reduction in the lifetime limit from ten million pounds to one million pounds, announced in the March 2020 Budget. The renaming reflected a shift in policy focus, but the core qualifying conditions for the relief remained the same. All claims made after that date use the new name on HMRC forms and tax returns.

What CGT rate applies under Business Asset Disposal Relief?

The original BADR rate was 10% on qualifying gains, but following the Autumn Budget 2024, this rate is increasing in two stages. From 6 April 2025, the rate rose to 14%. From 6 April 2026, it will increase further to 18%. These changes mean the tax saving compared to the main CGT rates is shrinking. You should consider timing your disposal carefully and speak to a qualified accountant about how these rate changes affect your specific situation.

What is the lifetime limit for BADR claims?

The lifetime limit for Business Asset Disposal Relief is one million pounds of qualifying gains. This means you can benefit from the reduced CGT rate on up to one million pounds of total gains across all disposals throughout your lifetime. The limit was reduced from ten million pounds in March 2020. Once you exceed this threshold, any further gains are taxed at the standard CGT rates, which are 18% for basic rate taxpayers and 24% for higher rate taxpayers.

What are the qualifying conditions for BADR on company shares?

To qualify for BADR on shares, you must own at least 5% of the company's ordinary share capital and 5% of the voting rights for a continuous period of at least two years before the date of disposal. You must also be an employee or officer of the company during that same two-year period. The company must be a trading company or the holding company of a trading group throughout the qualifying period for the claim to be valid.

How do I claim BADR on my Self Assessment tax return?

You claim Business Asset Disposal Relief through the Capital Gains Summary section of your Self Assessment tax return. You need to report the disposal details, calculate the gain, and then indicate that you are claiming BADR. The relevant section asks you to enter the amount of gain on which you are claiming the relief. If you are unsure how to complete this section correctly, it is advisable to work with a qualified accountant to avoid costly mistakes.

Can I claim BADR on assets other than company shares?

Yes, Business Asset Disposal Relief can also be claimed on the disposal of a sole trader business, a partnership interest, or individual business assets after the business has closed. For non-share assets, different qualifying rules apply regarding how long you have owned and used the assets in your business. You typically need to have owned the assets for at least two years and used them in a qualifying trade during that period. Speak to an accountant about your specific circumstances.

Should I sell before the April 2026 rate increase?

The CGT rate under BADR rises from 14% to 18% on 6 April 2026, so completing a disposal before that date could save a meaningful amount of tax on large gains. However, timing a business sale purely for tax reasons is rarely straightforward. You need to consider buyer readiness, commercial value, and whether rushing a sale could reduce the overall price you receive. A qualified accountant can model the tax impact of different sale dates and help you.

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