Business Asset Disposal Relief 2026: the £500,000 Limit - Updated November 2026
- BADR lifetime limit from 6 April 2027 (now £1m)
- £500,000BADR lifetime limit from 6 April 2027 (now £1m)
- BADR rate (unchanged)
- 18%BADR rate (unchanged)
- CGT payment bridging rates
- 0.65%–0.90%/moCGT payment bridging rates
- secured business loans from
- 5.50% APRsecured business loans from
The Budget on 28 October 2026 cut the Business Asset Disposal Relief (BADR) lifetime limit from £1 million to £500,000 for qualifying disposals on or after 6 April 2027. The 18% BADR rate is unchanged, so the cut means more of a larger gain is taxed at the main CGT rate. HMRC estimates about 13,000 of roughly 51,000 claimants will be affected. A new Founders' Relief at 10% on up to £10 million of lifetime gains starts on the same date, for a narrow group of founders.
BADR before and after 6 April 2027
Swipe the table sideways to see every column.
| Disposals to 5 April 2027 | Disposals from 6 April 2027 | |
|---|---|---|
| Lifetime limit | £1,000,000 | £500,000 |
| BADR rate | 18% | 18% |
| Earlier claims | Count against the limit | Count against the limit |
| Founders' Relief (10%, up to £10m lifetime) | Not available | Available to qualifying founders; BADR and Investors' Relief claims from 6 April 2027 count against the £10m |
Funding the tax bill: indicative rates, November 2026
Swipe the table sideways to see every column.
| Product | Indicative rate | Typical use |
|---|---|---|
| CGT payment bridging loan | 0.65%–0.90% per month | Pay CGT on time while sale proceeds, deferred consideration or other funds arrive |
| Secured business loan | from 5.50% APR | Business-level funding secured on property |
| Unsecured business loan | from 6.0% APR | Smaller amounts, trading businesses |
What the BADR change means for a business sale
Gains above £500,000
From 6 April 2027, qualifying gains above the new £500,000 lifetime limit are taxed at the main CGT rates instead of 18%. For a higher-rate taxpayer that is 24% in 2026/27.
Earlier claims
The lifetime limit takes account of BADR (and Entrepreneurs' Relief) you have already claimed. If you have used £500,000 or more already, there is no BADR left after 6 April 2027.
Timing and contracts
The old £1m limit applies to disposals before 6 April 2027. Anti-forestalling rules cover contracts exchanged before that date but not completed by it, so bringing a sale forward needs advice, not just a quick exchange.
Founders' Relief
A new 10% rate on up to £10m of lifetime gains for qualifying founders from 6 April 2027. The qualifying conditions are narrow; most sellers will rely on BADR.
Paying the tax
Deferred or earn-out consideration can leave a tax bill due before the cash arrives. A short-term bridge secured on property can fund the payment so HMRC interest and penalties do not run.
Information, not tax advice
This guide summarises the Budget 2026 policy papers. It is not tax advice. Whether a gain qualifies for BADR or Founders' Relief depends on detailed conditions; speak to a tax adviser before planning a sale around these dates.
Sources
Checked on 3 November 2026 against the HMRC and HM Treasury publications below. The changes are to be legislated in Finance Bill 2026-27, so the final law may differ.
What the lower BADR limit costs: worked example
- Sale completed by 5 April 2027 (all at 18%)
- £144,000
- Sale from 6 April 2027 (£500,000 at 18%, £300,000 at 24%)
- £162,000
- Extra CGT after the change
- £18,000
An £800,000 qualifying gain on selling a trading company, no earlier BADR claims, higher-rate taxpayer.
Simplified: ignores the annual exempt amount and any Founders' Relief. Uses the 2026/27 higher CGT rate of 24%. Not tax advice.
Terms the same working day — no upfront fees on loans over £1m
The figures above are indicative and describe the best case. Send your own scenario and we will come back the same working day with terms from the lenders that actually fit it.
- Enquiry type
- Tax Payment Finance
- About
- BADR Changes 2026
No upfront fees on loans over £1m.
What happens next
- Fill in the form. It takes about 2 minutes.
- We'll email you back with any additional questions, then match you with the right specialist for your situation.
- A specialist independent broker will contact you to discuss your situation and present options.
Enough detail to price it is the amount, the security, the purpose and how you plan to repay. The rest we can fill in on a call.
Whole of market · 130+ lenders · FCA 814533 · Same working day response
Rate context and outlook
The Autumn Budget on 28 October 2026 did not change how tax payment finance is priced: it is short-term secured or business lending, priced on the security and the exit.
Bank Rate is 3.75% (next decision Thu 5 Nov 2026). Most economists expect a rise to 4.00%: 54 of 63 in a Reuters poll on 15 October. Bridging and short-term business pricing follows lender funding costs rather than Bank Rate directly.
Reviewed by David Doulton, Director, Doulton Bridging Finance, over 20 years in property finance. Last reviewed 3 November 2026. Doulton Money Ltd t/a Doulton Bridging Finance, FCA No. 814533.
Frequently asked questions
What is the new BADR lifetime limit?
£500,000 for qualifying disposals on or after 6 April 2027, down from £1 million.
Has the BADR rate changed?
No. The BADR rate stays at 18%. What changes is how much gain can qualify.
When does the BADR change take effect?
For disposals on or after 6 April 2027. Disposals before then use the £1m limit, subject to the anti-forestalling rules for contracts exchanged but not completed before that date.
Do my previous claims count?
Yes. BADR and Entrepreneurs' Relief already claimed count against the lifetime limit.
What is Founders' Relief?
A new 10% CGT rate on up to £10m of lifetime gains for qualifying founders from 6 April 2027. The conditions are narrow, and BADR or Investors' Relief claimed from that date counts against the £10m.
How many people are affected by the BADR cut?
HMRC estimates about 13,000 of roughly 51,000 claimants, so around three in four are unaffected.
Can I borrow to pay CGT on a business sale?
Yes. A bridging loan secured on property typically costs 0.65%–0.90% per month and can fund the tax while sale proceeds or deferred consideration arrive.
How quickly can a bridging loan complete?
Typically 2–4 weeks; the latest market average is 46 days. Urgent cases with clean title and a quick valuation can complete in 7–10 working days.
What fees come on top of the interest rate?
An arrangement fee of 1%–2%, valuation of about £500–£1,500, legal fees of £1,500–£3,000 for both sides, and on some products an exit fee of up to 1%.
Can the interest be rolled up?
Yes. Most bridges roll interest into the loan and repay it at the end, so there are no monthly payments; serviced and retained interest are also available.
What exit strategies do lenders accept?
A sale, a refinance to a mortgage, or other funds such as an inheritance or business sale. The stronger the evidence, the better the rate.
Can I get a bridging loan with bad credit?
Often, yes. Lenders focus on the property and exit; recent defaults or CCJs usually move you up a pricing band rather than rule you out.
Is a bridging loan regulated?
Only when it is secured on a home you or your family live in or will live in. Investment and business bridges are unregulated.
Where this applies
Funding a tax bill from a business sale? Terms the same working day
Whole of market, 130+ lenders · FCA No. 814533