The changing tax landscape: Why integrated advice is crucial
For business disposals, the tax environment continues to evolve. While there’s no cause for alarm, the imminent changes mean receiving expert professional advice is critical to maximising your exit outcome.
From April 2026, the rate of Business Asset Disposal Relief (BADR) will increase to 18%, having already moved from 10% to 14% in April 2025. While the £1million lifetime allowance remains unchanged, the benefit of the relief has gradually reduced.
Yet BADR still provides a meaningful advantage compared to the standard 24% Capital Gains Tax rate for higher-rate taxpayers. What these changes do highlight, however, is that tax efficiency is no longer a secondary consideration in business sales – it is central to overall value.
In today’s market, a successful exit is defined not simply by headline valuation, but by net proceeds. A £40,000 differential on a £1million gain may not alter the strategic rationale for a sale, but across larger transactions or multiple shareholders, the impact becomes more significant. As the margin between relief rates narrows, the quality of structuring and advice becomes increasingly important.
Most owners contemplating a sale in the next 12-24 months will complete under the 18% BADR rate. The focus therefore should not be on attempting to outpace legislative change, but on ensuring eligibility is secured, structuring is optimised and the transaction is executed in the most tax-efficient manner possible.
Early planning protects eventual value
This requires early coordination between business sales advisers and tax specialists. Qualification for BADR is not automatic. The two-year ownership and employment conditions must be satisfied, shareholdings reviewed and any pre-sale restructuring considered carefully.
In some cases, relatively straightforward planning for your business sale can materially improve the outcome. In others, alternative routes such as phased disposals, management buyouts or employee ownership structures may warrant consideration.
An integrated approach to exit planning
At KBS Corporate, we believe tax advice should go hand in hand with sale planning and be readily available to clients who require it. Alongside leading a competitive and well-managed business sale process, we work closely with our colleagues at K3 Tax Advisory to ensure that where tax structuring input is needed, it is introduced at the right stage and aligned with the overall transaction strategy.
At the appropriate point in a sale strategy, a tailored pre-sale tax review can identify potential risks, confirm relief eligibility and explore structuring options designed to enhance overall deal value.
Where required, transactional tax guidance and HMRC clearances can be secured to provide certainty. This coordinated approach ensures shareholders are properly prepared and that value is protected rather than eroded.
Tax legislation will continue to evolve. What remains constant is the importance of planning early and surrounding yourself with experienced advisers who understand both the mechanics of a sale and the structuring considerations behind it.
In a market where sophisticated buyers scrutinise every aspect of a transaction, sellers should apply the same rigour to their own position.
Maximising value is not only about negotiating the right price. It’s about structuring the right outcome.