Buying a business

Business Asset Disposal Relief is changing in April 2027: what it means for buyers

Business Asset Disposal Relief is capped at £500,000 of gains from 6 April 2027. If your seller wants to finish first, plan the timetable without rushing the deal.

Reading time 5 min read

Category Business guides

Written by The bizbritain team

From 6 April 2027, the lifetime limit on Business Asset Disposal Relief falls from £1 million to £500,000. Some sellers with large gains will want to complete their sale before that date. If you are buying, their deadline can set your timetable. It should not set your terms.

This guide covers what changes, how to work back from the deadline, and what not to rush.

Section 01

What changes with Business Asset Disposal Relief in April 2027?

Business Asset Disposal Relief lowers the Capital Gains Tax an owner pays when they sell a qualifying business. Gains that qualify are taxed at 18%. That rate is not changing.

What changes is the cap. Today the relief covers up to £1 million of gains over a person's lifetime. For sales made on or after 6 April 2027, the limit is £500,000.

Most sellers are not affected. According to HMRC, about three-quarters of the roughly 51,000 people who claim the relief will still get it on their whole gain. HMRC expects around 13,000 people to be affected.

So the seller in a hurry is usually one with a gain above £500,000. If your seller mentions April, that is probably why.

There are also new rules for contracts signed before 6 April 2027 but completed after it. They are aimed at deals timed to beat the change. How they apply to a seller is a question for the seller's tax adviser, not for you.

Section 02

Can your deal complete before 6 April?

It can, if you start now. According to Franklins Solicitors, most SME acquisitions complete within three to six months of heads of terms.

Work back from 6 April and the dates are tight. Six months before is already behind us. Three months before is early January.

Now to December

Get your finance conversation started

Find out what you can borrow and how much of your own money the deal needs. A seller in a hurry will ask how you plan to pay.

By early January

Agree heads of terms

Heads of terms set out the price and the main terms. Ask for an exclusivity period and a cut-off date for the seller's answers.

January to March

Run the checks side by side

Due diligence, the lender's assessment and the legal documents can run at the same time. Landlord consent and licences often take longest, so start them early.

Before 6 April

Complete

The money moves and the business changes hands. If a check is not finished, move the date rather than skip the check.

Would you still buy this business if completion slipped to May?

Our realistic timeline for how long it takes to buy a business goes through each stage in more detail.

Section 03

What you should not rush

A deadline is the seller's problem. A bad deal would be yours. Three things deserve their full time, whatever the calendar says.

Due diligence
Check the accounts, contracts, staff and lease properly. A lender will check much of this too, as our guide to what your lender will check in due diligence explains.
Warranties
Warranties are the seller's promises about the business in the sale agreement. Do not accept weaker ones to save a week.
The price
A seller racing a deadline may push you to agree quickly. The price should still match what the business earns.

Section 04

How a seller's deadline can help the buyer

A deadline gives you some leverage. A seller who wants to complete before April needs a buyer who is ready.

A buyer with their finance in progress is worth more to that seller than a higher offer that might not complete in time. That can help you on price, on terms or on how much the seller leaves in the deal.

Be ready before you ask for anything. A broker can look at the deal across a wider range of lenders and tell you early what is realistic.

When you want to start, talk to us as your acquisition finance broker. We work with a panel of 100+ lenders. You pay bizbritain nothing unless a lender on our panel issues an Agreement in Principle.

This guide is general information, not financial advice. Applications are subject to status, affordability and lender criteria.

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