A sole trader sells their qualifying business in 2026/27. What is the main feature of Business Asset Disposal Relief for this disposal?
Answer and explanation
Correct answer: A. Qualifying gains up to a lifetime limit of £1 million are taxed at 18%
- Step 1: BADR reduces the rate of CGT on qualifying business disposals.
- Step 2: From 6 April 2026 the rate is 18% on gains up to the £1 million lifetime limit.
Answer
Qualifying gains up to a lifetime limit of £1 million are taxed at 18%.
Why not the others: BADR does not exempt the gain entirely. 24% is the standard higher rate, which the relief improves on. Private residence relief covers the main home; BADR applies to qualifying business assets.
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