Maximize Your Clients’ CGT Relief: Act Now Before April 2025

As part of our services at DCA Business Recovery, we are here to assist you and your clients in navigating these recent changes and taking advantage of the current 10% CGT rate under Business Asset Disposal Relief (BADR).

Proposed Changes

With the recent Budget update, CGT rates saw an increase to 24%—less than expected, but still higher than before. However, the major news is the scheduled rise in BADR rates. Starting in April 2025, the tax rate under BADR will rise from 10% to 14%, followed by another increase to 18% in April 2026.

While the £1 million lifetime allowance remains unchanged, these tax increases could mean significant extra costs for your clients, particularly for those with multiple shareholders who qualify for BADR.

Delaying a sale could lead to additional tax costs of £40,000 by 2025/26 and up to £80,000 by 2026/27.

How to Take Advantage of The Current Rates

For business owners ready to move forward, the opportunity to secure the 10% rate on a sale will close on 5th April 2025. We recommend initiating any potential transactions as soon as possible to avoid missing out on this lower rate.

Transactions, even relatively straightforward ones like management buyouts or share buybacks, can take up to five months, while deals with trade buyers or private equity investors may take even longer due to extensive due diligence processes.

At DCA Business Recovery, we’re prepared to support your clients through this process. If any of your clients are considering a sale and would benefit from expert guidance in relation to a solvent Liquidation, we’d be pleased to discuss their options with you in confidence.

Please feel free to reach out at your convenience to discuss how we can assist you and your clients in making the most of this time-sensitive opportunity.