The rules
Retiring business owner exit tax rules, with sources
Updated
Eleven rules a retiring owner meets on selling, each read from GOV.UK or the Taxation of Chargeable Gains Act 1992 between 12 and 28 October 2026.
The rules, one by one
Business Asset Disposal Relief: 18% from 6 April 2026
18% on all gains on qualifying assets disposed of from 6 April 2026. (read 27 October 2026)
Source: GOV.UK: Business Asset Disposal Relief, eligibility
Business Asset Disposal Relief: 14% in 2025 to 2026
14% on all gains on qualifying assets disposed of between 6 April 2025 and 5 April 2026. (read 27 October 2026)
Source: GOV.UK: Business Asset Disposal Relief, eligibility
Business Asset Disposal Relief: 10% to 5 April 2025
10% on all gains on qualifying assets disposed of on or before 5 April 2025. (read 27 October 2026)
Source: GOV.UK: Business Asset Disposal Relief, eligibility
Owned for at least 2 years
To qualify you must have owned the business for at least 2 years. (read 27 October 2026)
Source: GOV.UK: Business Asset Disposal Relief, eligibility
Sell the assets within 3 years of closing
You must also dispose of your business assets within 3 years to qualify for relief. (read 27 October 2026)
Source: GOV.UK: Business Asset Disposal Relief, eligibility
A personal company: at least 5%
You must have at least 5% of the voting rights, and be entitled to at least 5% of the profits, the assets on a winding up, or the proceeds on a sale. (read 27 October 2026)
Source: GOV.UK: Business Asset Disposal Relief, eligibility
Lifetime limit: £1 million
The relief is capped where a person's qualifying gains exceed £1 million over their lifetime. (read 28 October 2026)
Source: Taxation of Chargeable Gains Act 1992, Part V Chapter 3
Capital Gains Tax: 18% and 24% from 6 April 2026
You pay 18% on gains within the basic Income Tax band and 24% on any amount above it, on gains made from 6 April 2026. (read 12 October 2026)
Source: GOV.UK: Capital Gains Tax rates
Annual exempt amount: £3,000
For the 2026 to 2027 tax year the Capital Gains Tax allowance is £3,000. (read 12 October 2026)
Source: GOV.UK: Capital Gains Tax rates
Inheritance Tax Business Relief: 100% or 50%
You can get Business Relief of either 100% or 50% on some of an estate's business assets, which can be passed on. (read 24 October 2026)
Source: GOV.UK: Business Relief for Inheritance Tax
Two routes stated in prose
A sale to an employee ownership trust can be fully relieved from Capital Gains Tax when its conditions are met; HMRC's Capital Gains Manual sets the conditions out.
Source: HMRC Capital Gains Manual CG67800: employee-ownership trusts
The government's policy paper on agricultural and business property relief reforms sets the April 2026 cap on 100% Business Relief.
Source: GOV.UK: agricultural and business property relief reforms