Business Asset Disposal Relief

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Work out your tax

How you work out your tax depends on whether all your gains are eligible for Business Asset Disposal Relief.

If all your gains qualify for Business Asset Disposal Relief

  1. Work out the gain for all qualifying assets.

  2. Add together the gains (and deduct qualifying losses) to work out the total taxable gain that’s eligible for Business Asset Disposal Relief.

  3. Deduct your tax-free allowance.

  4. You’ll pay 10% tax on what’s left.

If you have other gains

How much tax you pay on your other gains depends on what Income Tax rate you pay.

Higher rate Income Tax payers

For gains that do not qualify for Business Asset Disposal Relief, you’ll pay: 

  • 24% on gains from residential property
  • 24% on other chargeable assets (or 20% for gains made between 6 April 2024 to 29 October 2024)

You can use your tax-free allowance against the gains that would be charged at the highest rates (for example where you would pay 24% tax).

For the tax years 6 April 2019 to 5 April 2024, you’ll pay 28% on gains from residential property and 20% on gains made from other chargeable assets.

Basic rate Income Tax payers

If you’re a basic rate taxpayer, you need to work out the tax rate you’ll pay on gains that are not eligible for Business Asset Disposal Relief.

  1. Work out how much taxable income you have - deduct your Personal Allowance and any other Income Tax reliefs you’re entitled to.

  2. Deduct this amount from the basic rate tax band for the year you made the gains (£37,700 for the 2024 to 2025 tax year). This gives you the amount of basic rate band you can use against your gains.

  3. Work out your total taxable gain.

  4. Use your basic rate band first against any gains eligible for Business Asset Disposal Relief. You’ll pay 10% tax on these.

  5. Use any remaining basic rate band against your other gains. You’ll pay 18% on gains made from 30 October 2024. You’ll pay 18% on gains made on residential property and 10% on gains from all other chargeable assets between 6 April 2024 and 29 October 2024.

  6. For gains above the basic rate band, you’ll pay 24% on gains made from 30 October 2024. You’ll pay 24% on gains made on residential property and 20% on gains from all other chargeable assets between 6 April 2024 to 29 October 2024.

  7. You can use your tax-free allowance against the gains that would be charged at the highest rates (for example where you would pay 24% tax).

Disposals between 6 April 2024 to 29 October 2024

At the basic rate you’ll pay 18% on gains made on residential property and 10% on gains from all other chargeable assets. Above the basic rate, you’ll pay 24% on gains from residential property and 20% on gains from other chargeable assets.

Disposals between 6 April 2019 to 5 April 2024

At the basic rate you’ll pay 18% on gains made on residential property and 10% on gains from all other chargeable assets. Above the basic rate, you’ll pay 28% on gains from residential property and 20% on gains made from other chargeable assets.

Get help

Contact HM Revenue and Customs (HMRC) or get professional tax help if you need advice.

View a printable version of the whole guide

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