Capital Gains & Business
Exit Planning
How to Keep More of What You've Built
Selling your business is one of the most significant financial decisions you will ever make. Yet many business owners spend months negotiating the perfect deal — only to discover too late that poor tax planning has cost them a substantial portion of the proceeds. This is precisely why seeking professional Tax Advice on Capital Gains Tax (CGT) in UK early in the process is not optional — it is essential. The difference between acting now and acting too late could mean tens of thousands of pounds in avoidable tax. If you are considering a business exit, structured and strategic planning from the outset is everything.
Understanding Capital Gains Tax Rates (From 6 April 2025)
Before planning your exit, it is essential to understand what CGT rates currently apply — because the numbers have changed. If you are a higher or additional rate taxpayer, from 6 April 2025 you will pay:
| Taxpayer Type | Residential Property | Other Assets | Carried Interest |
|---|---|---|---|
| Basic Rate | 18% | 18% | 32% |
| Higher/Additional | 24% | 24% | 32% |
Before planning your exit, it is essential to understand what CGT rates currently apply — because the numbers have changed. If you are a higher or additional rate taxpayer, from 6 April 2025 you will pay:
For the 2025–2026 tax year, the CGT tax-free allowance is £3,000. This is deducted from your total taxable gain before calculating the tax owed. It is also worth noting that you do not usually pay CGT when selling your primary home.
To illustrate: if your taxable income is £20,000 and your gain is £12,600, after deducting the £3,000 allowance you have £9,600 taxable. Adding this to your income gives £29,600 — within the basic rate band of £37,700 — so you pay 18%, totalling £1,728.
Understanding which band you fall into is critical. Expert Tax Advice on Capital Gains Tax (CGT) in UK can help you structure your affairs to remain within the most favourable rate band wherever possible.
Business Asset Disposal Relief: Plan Early or Miss Out
For business owners, Business Asset Disposal Relief (BADR) remains one of the most powerful CGT reliefs available. From 6 April 2025, qualifying sole traders and partnerships pay just 14% on gains that qualify — significantly below the standard rates.
To qualify, you must have been an officer or employee of the company and held at least 5% of shares and voting rights for a minimum of two years before the sale. This two-year qualifying window means planning must begin well in advance. Last-minute restructuring will not satisfy HMRC's conditions.
Share Structure and Timing Can Transform Your Tax Position
How your business is structured before a sale can make a considerable difference. Selling shares rather than assets is generally more tax-efficient. Introducing growth shares or an EMI scheme well ahead of exit can distribute gains tax-efficiently across multiple stakeholders.
Timing the disposal across two tax years — or using an earn-out arrangement — can also help spread the CGT liability and potentially keep combined income and gains within a lower rate band.
Clean Accounts Support a Stronger Sale
Buyers scrutinise your financials closely. Professionally prepared Annual Accounts Services in London do more than satisfy HMRC — they support a stronger valuation and give buyers confidence. Poorly maintained accounts can delay a deal or reduce the price offered significantly.
Act Now — Not When You're Ready to Sell
The difference between structured exit planning and last-minute advice can be tens or hundreds of thousands of pounds. Speak to qualified Accountants and Tax Advisors in London today and ensure your hard-earned business rewards you fully when it matters most.
