Business Owners
Business Sales and BADR
Tax planning before you sell or exit your business
Overview
Selling a business is a major transaction and the tax position should be reviewed before heads of terms are agreed. The structure of the deal, the timing of the sale, the treatment of earn-outs and whether the company is a trading company can materially affect the tax payable.
Business Asset Disposal Relief (BADR) may reduce the Capital Gains Tax rate on qualifying disposals, but it is not automatic. The rate and availability of relief depend on the date of disposal, the lifetime limit, the shareholder's ownership position and whether the company meets the relevant trading conditions.
We help business owners review BADR eligibility, identify risks before completion and structure the transaction in a tax-efficient and commercially robust way.
Key Areas Covered
What we cover as part of this service.
- Business Asset Disposal Relief eligibility and conditions
- Trading company and substantial non-trading activity tests
- Share sale versus asset sale tax implications
- Earn-outs, deferred consideration and loan notes
- Goodwill, restrictive covenants and employment arrangements
- Multiple completion payments and timing issues
- Pre-sale restructuring and clearance considerations
- Shareholder exits and family succession
- Coordination with solicitors and corporate finance advisers
Common Issues We Solve
Problems we see regularly — and how we fix them.
BADR Risk Identified Too Late
A company with investment assets, surplus cash or non-trading activities may have BADR issues. We identify risks before the sale timetable becomes difficult to change.
Earn-Out Complexity
Deferred consideration and earn-outs need careful drafting. Poor structuring can create uncertainty over timing, valuation and relief availability.
Inefficient Transaction Structure
The tax result can differ significantly depending on whether the deal is structured as a share sale, asset sale, liquidation, reorganisation or staged exit.
Pricing for This Service
Clear fees. Fixed fee confirmed in writing before we begin.
Priced on consultation
Business sale and exit planning is quoted after an initial review of the transaction and scope.
Fixed fee confirmed in writing before we begin.
Get Your Fixed QuoteFrequently Asked Questions
This depends on the detailed conditions, including shareholding percentage, officer or employee status, period of ownership and whether the company is a trading company or holding company of a trading group. We assess this before completion.
For disposals between 6 April 2025 and 5 April 2026, qualifying BADR gains are charged at 14%. For disposals on or after 6 April 2026, qualifying gains are charged at 18%. Previous 10% references should not be used for current planning without checking the disposal date.
A share sale is often more efficient for the seller, but the correct structure depends on the buyer's position, the company's assets, liabilities, warranties and commercial terms.
Earn-outs and deferred consideration have specific CGT rules. The tax treatment depends on how the earn-out is structured and valued. Early advice is important.
Post-sale salary, consultancy payments and restrictive covenant payments need to be separated from capital sale proceeds and documented correctly.
Why Choose UA Tax
Pre-Sale Review
We assess the tax position before terms are locked in.
BADR and CGT Expertise
We review relief conditions, timing and transaction structure.
Professional Coordination
We work alongside solicitors and other advisers to support a clean implementation.
Client success story
Business Exit Planning Review
Situation
Business owner considering a sale of shares with part of the price deferred and subject to performance targets.
Challenge
The shareholder needed clarity on BADR eligibility, the treatment of deferred consideration and whether any pre-sale restructuring was needed.
Solution
We reviewed the shareholding history, trading status, earn-out mechanics and proposed legal documents. We highlighted tax risks and suggested amendments for the legal team to consider.
Outcome
The client entered negotiations with a clearer understanding of the likely tax position and the key matters to protect before completion. The final tax result remained subject to the agreed legal documentation and completion mechanics.
Ready to discuss your business sale?
Book a consultation and we will confirm what you need and provide a fixed fee quote.