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Home / Simons-Taxes /IHT, trusts and estates /Part I5 Settled property /Division I5.10 Income tax and CGT for trustees /Taxation of trustees—CGT / I5.1018A Trusts—business asset disposal relief (BADR)
Commentary

I5.1018A Trusts—business asset disposal relief (BADR)


IHT, trusts and estates

Business asset disposal relief (BADR) applies to a disposal of trust business assets, which occurs when certain conditions are met1:

  1. Ìý

    (a)ÌýÌýÌýÌý the trustees of a settlement make a disposal of business assets

  2. Ìý

    (b)ÌýÌýÌýÌý there is an individual who is a qualifying beneficiary, and

  3. Ìý

    (c)ÌýÌýÌýÌý the relevant condition applicable to the type of asset disposed of is met

Gains that qualify for business asset disposal relief are subject to capital gains tax at the rate of 10% for disposals before 5 April 2025, 14% for disposals from 6 April 2025 to 5 April 2026 and 18% for disposals made thereafter2.

Anti-forestalling rules apply on the change in general CGT rates on 30 October 2024 and as a result of the increase in BADR rates from 6 April 2025, see C3.1307 and on share reorganisations, see C3.1308.

Settlement business assets

Settlement business assets are either3:

  1. Ìý

    •ÌýÌýÌýÌý assets which form part of the settled property and which consist of (or of interests in) shares

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