CTA OMB

May 2026 CTA OMB AT

Business Asset Disposal Relief (‘BADR’)

Material Disposal of business assets

• Personal trading company (Non trading activities should not exceed 20%)

• At least 5% of the ordinary share capital.

• Must be satisfised for at least 2 years

Claim must be made on or before the first anniversary of the 31 January following the tax year of disposal.

Associated disposals

• Owns an asset which is used by the partnership/company and sells the asset in conjunction with the material disposal.

• Must have been used in the business for at least 2 years.

• Must comprise at least 5% of the shareholding in a company / a 5% share in partnership assets.

Restricted for:

• The asset has not been used in the business throughout its period of ownership.

• The individual charges rent for the use of the asset for the periods after 5 April 2008.

Election can be made when there’s been a dilution of shareholding in a personal company → “notional disposal and reacquisition”

Rollover Relief

When a trader sells one business asset and replaces it with another.

Qualifying assets include

• Land and buildings

• Goodwill

• Fixed plant and machinery

The new asset must be acquired in the period 12 months before to 36 months after the sale of the old asset.

Claim must be made within 4 years.

Depreciating assets (Useful life of less than 60 years) - > Gain crystalises at earliest of:

• Sale of the depreciating asset

• Ceasing to use the asset for trade purposes.

• 10 years from acquisition.

Gift Relief

If an asset is gifted, this is a disposal at market value.

Gift relief is available for ‘business assets’ as follows

• Shares in an unquoted trading company.

• Shares in a personal trading company (>=5% of voting rights)

• Assets used in a sole trader business, partnership or a personal trading company).

• Agricultural land and buildings.

Available where a gift is immediately chargeable to inheritance tax.

Joint election

Restrictions on gifts of shares in personal trading company.

• Qualifying gain = CBA/CA * Share gain

Residence status → If donee emigrates within 6 years of the tax year of gift, the deferred gain is charged on the donee at emigration.

Partnership - Capital gains

On the sale of an asset by a partnership, each partner is deemed to have disposed of a fraction share in the asset.

There are no CGT consequences when an incoming partner introduced cash or withdraws funds.

If a partner transfers an asset into the partnership, the partner is treated as having made a part disposal of the asset.

Revaluation of assets has no CGT consequences.

If asset has been revalued there will be a gain/loss on a partner leaving / joining the partnership.