Business owners, entrepreneurs and commercial property owners: important changes to Business Asset Disposal Relief are approaching. If you are considering selling, now is the time to plan.

If you have spent years building a successful business, you may be approaching the point where you want to sell, retire, release capital or move on to your next venture.

However, an important change to Capital Gains Tax could make a significant difference to the amount of tax you pay when disposing of qualifying business assets.

From 6 April 2027, the Government is reducing the lifetime limit for Business Asset Disposal Relief (BADR) from £1 million to £500,000.

For business owners planning an exit, this could have substantial financial implications.

At Lewis Mitchell Solicitors, we are encouraging business owners and commercial property owners who are considering a sale to start their preparations early and explore whether an accelerated conveyancing transaction may be appropriate.

What is changing on 6 April 2027?

Business Asset Disposal Relief, previously known as Entrepreneurs’ Relief, allows individuals disposing of qualifying business assets to benefit from a reduced rate of Capital Gains Tax.

Under the current rules:

• The lifetime limit is £1 million of qualifying gains per individual.
• Qualifying gains are currently subject to Capital Gains Tax at 18%.
• The relief may apply to the disposal of a qualifying business, shares in a personal trading company and certain business assets.

From 6 April 2027, the lifetime limit will be reduced to £500,000.

This means that business owners disposing of qualifying assets on or after that date will have a significantly reduced amount of gains eligible for the relief.

Any qualifying gains exceeding the available lifetime limit will be subject to the applicable standard Capital Gains Tax rates.

Importantly, the lifetime limit is not an annual allowance. It takes account of previous claims for Business Asset Disposal Relief.

What could this mean financially?

Consider a business owner who sells their qualifying business and makes a capital gain of £900,000, assuming they have not previously claimed Business Asset Disposal Relief and satisfy all the qualifying conditions.

Under the current 18% BADR rate, the tax on the qualifying portion would be £162,000 before taking account of other reliefs or allowances.

Under the new rules, only £500,000 would qualify for BADR, with the remaining £400,000 potentially subject to the higher applicable CGT rate.

The actual tax liability will depend on the individual’s circumstances, including other gains, losses, available allowances and applicable CGT rates.

This illustrates why the timing of a proposed business disposal deserves careful consideration.

Why waiting until 2027 could be too late

A business sale or commercial property disposal can involve considerable legal work.

There may be title investigations, searches, planning considerations, outstanding charges, lease arrangements, management company requirements, enquiries and contractual negotiations to resolve.

Even a relatively straightforward commercial property transaction can take several weeks or months if matters are not properly prepared.

If you are considering selling, leaving everything until early 2027 could put unnecessary pressure on the transaction.

Our recommendation is to begin preparations now, allowing sufficient time for the legal work, negotiations and necessary documentation.

It is important to understand that simply signing a contract before 6 April 2027 will not automatically secure the previous £1 million limit. Specific anti-forestalling provisions apply to certain unconditional contracts entered into before the deadline, and specialist tax advice should be obtained before relying on the timing of a transaction.

Our Fast-Track Conveyancing Service – Helping You Beat the Deadline

At Lewis Mitchell Solicitors, we offer an accelerated conveyancing service designed for clients who need to complete property transactions within a significantly shorter timeframe than the traditional conveyancing process.

For eligible transactions, our Fast-Track service can offer:

24-Hour Exchange

An accelerated exchange service aimed at achieving exchange within 24 hours, subject to the necessary legal requirements and documentation being in place.

48-Hour Exchange

For transactions requiring a slightly longer preparation period, our 48-hour service provides an alternative accelerated timetable.

Fixed-Day Exchange

A targeted 10-working-day exchange timetable, incorporating a search package and structured progression of the transaction.

3–21 Day Exchange

An accelerated service for clients requiring a transaction to progress within an agreed period of between 3 and 21 days.

Same-Day Exchange and Completion

Where circumstances and the legal requirements permit, we can also consider transactions requiring exchange and completion on the same day.

Each transaction is assessed individually. The availability of an accelerated service will depend on the title, the parties involved, the availability of documentation, funding arrangements and the extent of enquiries required.

Our objective is to identify potential obstacles at the outset and progress the legal work as efficiently as possible.

What types of transactions can we assist with?

Our accelerated conveyancing services may be suitable for:

• Business owners selling commercial premises.
• Entrepreneurs disposing of business premises used in their trade.
• Owners selling investment or commercial property portfolios.
• Commercial landlords disposing of property interests.
• Business owners selling premises as part of a wider retirement or exit strategy.
• Investors looking to complete commercial property disposals within a defined timeframe.

Where the sale involves shares in a company, a business acquisition or the disposal of a wider trading business, additional corporate and tax advice may be required. Our conveyancing service deals with the property element of the transaction.

Don’t leave your preparations until the last minute

The reduction in the Business Asset Disposal Relief lifetime limit is an important consideration for anyone contemplating a qualifying business disposal.

If you are considering retirement, selling your business premises or releasing capital from your commercial property investments, the time to start planning is now.

An early instruction gives us the opportunity to review the title, identify potential issues, obtain the necessary documentation and establish whether an accelerated transaction is achievable.

The April 2027 deadline is approaching. Early preparation could make all the difference.

Contact Lewis Mitchell Solicitors – Nationwide Service

If you are considering selling your business premises or undertaking a commercial property disposal, speak to our team about our Fast-Track Conveyancing Service.

We can discuss the proposed transaction, assess the timescale and explain the options available.

Lewis Mitchell Solicitors

Telephone: 01200 428102

Primrose Dairy, Railway View Road, Clitheroe, BB7 2HE

Important: This article provides general information and does not constitute tax advice. Business Asset Disposal Relief is subject to strict qualifying conditions. The applicable date of disposal, previous claims, contractual arrangements and anti-forestalling provisions must be considered. We recommend obtaining independent tax advice from a suitably qualified tax adviser before entering into any transaction or relying on the April 2027 deadline. An accelerated conveyancing service does not guarantee completion by a particular date.