Selling your business? How to minimise Capital Gains Tax

18 August 2026

Selling a business can be the culmination of years of hard work. But before agreeing a deal, it is important to understand how much of the proceeds you will actually keep after tax.

For many business owners, Capital Gains Tax (CGT) is one of the biggest considerations – and planning ahead can make a significant difference.

“When selling your business, what you ultimately take away from the sale can depend significantly on the tax planning carried out before the deal is agreed.”

How does Capital Gains Tax apply when selling a business?

CGT is generally charged on the gain you make when disposing of an asset, rather than simply on the amount you receive.

For example, if you sell shares in your company, the taxable gain will broadly be calculated by taking the sale proceeds and deducting the allowable cost of acquiring the shares, together with certain allowable costs and reliefs.

The way a business sale is structured is also important. Selling shares in a limited company can produce a very different tax outcome from the company selling its underlying business and assets.

It is the gain that matters for CGT – not simply the sale price.
The structure of the transaction can also have a significant impact on the overall tax position, so it is important to consider this before agreeing the terms of a sale.

Could you qualify for Business Asset Disposal Relief?

One of the most important reliefs for business owners is Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs’ Relief.

For qualifying disposals made from 6 April 2026, BADR can reduce the CGT rate on qualifying gains to 18%.

There are, however, strict qualifying conditions.

For shareholders, these generally include being an employee or office holder, the company being a trading company or holding company of a trading group and, in many cases, satisfying minimum 5% shareholding, voting and economic interest requirements for at least two years before the sale.

This is why tax planning should begin well before you put your business on the market.

“Some valuable tax reliefs depend on conditions being met for a period before the sale. By the time a buyer makes an offer, it may be too late to put everything in place.”

What can you do to minimise CGT?

There isn’t one solution that works for every business sale. Depending on your circumstances, planning could include:

Ensuring you satisfy the conditions for Business Asset Disposal Relief – Check your eligibility well in advance of a potential sale.
Reviewing the company’s activities and ownership structure – Consider whether anything within the business could affect the availability of tax reliefs.
Considering a share sale or asset sale – The structure of the transaction can result in very different tax outcomes.
Making use of available capital losses and allowances – These may help reduce the amount of gain on which CGT is payable.
Considering jointly owned assets or interests – Ownership arrangements can have tax implications that should be reviewed before a transaction.
Looking at other available reliefs – Depending on your circumstances, other CGT reliefs may be relevant.

Gift Hold-Over Relief, for example, can sometimes defer CGT where qualifying business assets or shares are passed to another person, which can be particularly relevant to family business succession planning.

There is no single way to minimise CGT on every business sale.
The right approach will depend on your business, its ownership, the structure of the proposed transaction and the tax reliefs available to you.

Plan before you sell

The most important point is timing. Some valuable tax reliefs have conditions that must have been satisfied for a period before the disposal. Waiting until a buyer has made an offer may therefore leave fewer planning opportunities available.

If you’re considering selling your business – whether that’s this year or several years from now – speaking to your accountant early can help you understand the potential tax liability, identify available reliefs and structure the transaction appropriately.

Do not wait until a deal is on the table.
Starting the tax planning process early can give you more options and help ensure valuable reliefs are not lost because qualifying conditions have not been met in time.

Speak to Evans Entwistle

Selling a business is a major financial decision, and the tax consequences can have a significant impact on how much of the proceeds you ultimately retain.

Understanding your potential Capital Gains Tax liability, whether you qualify for Business Asset Disposal Relief and how the transaction should be structured can help you make informed decisions before negotiations with a buyer are finalised.

At Evans Entwistle, we can help you understand the potential tax implications of selling your business, identify relevant reliefs and consider the steps that may be available before a sale takes place.

Thinking of selling your business? Speak to Evans Entwistle before you make the move. Early tax planning could make a significant difference to what you ultimately take away from the sale.