Bitesize Insights · Budget 2026
Budget 2026 changes the tax assumptions behind business sales, succession and some investment transactions. The key distinction is between proposed April 2027 reforms and measures announced with effect from 28 October 2026.
Two exit reliefs to review
Planned legislation
BADR: £1m becomes £500,000
The government plans to halve the lifetime limit of qualifying gains for Business Asset Disposal Relief. This is not a cap on sale proceeds. Past relief claims count towards the limit. Special provisions cover certain earlier contracts and share reorganisations, so signing before April does not automatically preserve the old limit. Read HMRC’s BADR policy paper.
Under consultation
Founders’ Relief: proposed 10% CGT
The proposal offers 10% CGT on up to £10m of lifetime qualifying gains for eligible founders and significant early investors. Individual conditions and company growth, innovation and UK-presence tests apply. It is not a replacement relief for every BADR claimant. The proposed limit is reduced by BADR and Investors’ Relief claims from 6 April 2027. See our Founders’ Relief eligibility update.
The Treasury consultation closes on 30 November 2026. Final design remains subject to consultation and legislation.
Other reforms planned for April 2027
- Business gifts: the holdover-relief restriction formula would include relevant assets within the substantial shareholding exemption and intangible fixed assets regimes. For mixed trading and non-trading assets, the effect can increase or reduce relief. The proposed start is 6 April 2027. HMRC’s gift-relief paper.
- DeFi: specified cryptoasset lending and liquidity-pool transactions by individuals and trustees would receive no-gain, no-loss treatment from 6 April 2027, generally deferring CGT until an economic disposal. This is not an exemption for all crypto transactions. Check the qualifying arrangements.
- Eligible stablecoins: planned rules bring their tax treatment closer to money, with transitional provisions and changes to interest-like returns and withholding. Start dates differ: 1 April 2027 for companies and 6 April 2027 for individuals and trustees. Read HMRC’s stablecoin paper.
Measures announced with effect from 28 October 2026
The Budget proposes legislation with the following effective dates. Check the relevant transaction and draft rules:
- Residential property reporting: for qualifying Self Assessment returns delivered from that date, late filing penalties for the missed UK property return would stop accruing once the disposal is reported through Self Assessment. This does not remove the original 60-day reporting and payment obligations or automatically cancel existing penalties. Property-return details.
- Non-resident protected cell companies: the participator test would apply at individual-cell level as well as company level for gains accruing from that date. Protected-cell policy paper.
- Contractual rights: capital sums received from that date under a contract for loss of rights under that contract would be brought within the capital gains rules. This does not mean every contractual payment is taxable as a capital gain. Surrender-of-rights policy paper.
The Consult EFC view
Revisit your expected net proceeds, past relief claims and transaction timetable with your tax adviser. Keep sale value, available relief and personal cash outcomes separate. Avoid accelerating a deal solely on the assumption that an earlier contract secures earlier tax treatment.
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Over 12 years across Big Four audit, Investment Banking, and corporate advisory. Kish works with SaaS founders, tech companies, and ambitious UK SMEs from £1M to £50M in revenue on fundraising, valuations, exit planning, and financial strategy. ICAEW regulated. Big Four trained. Based in London.