For many business owners and investors, the headline news from the 2026 Autumn Budget was what did not change.
The Government confirmed that the main rates of Capital Gains Tax (CGT) will remain unchanged. After the annual exempt amount of £3,000, gains will generally continue to be taxed at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. However, while the rates themselves remain stable, the rules surrounding Capital Gains Tax are changing in ways that could have significant implications for business owners, company founders, investors and property owners.
For many individuals, the focus should not simply be on the tax rates themselves but on the reliefs available and how future transactions are structured. Those considering retirement, succession planning, a business sale or significant investment decisions should review their plans well in advance of the new rules taking effect.
Business Asset Disposal Relief Changes
One of the most significant announcements concerns Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs’ Relief.
BADR allows qualifying business owners to pay Capital Gains Tax at a reduced rate of 18% rather than the standard higher rate of 24% when selling all or part of their business. For many entrepreneurs, this relief has played an important role in reducing the tax cost of exiting a business after years of building and growing it.
Although the 18% tax rate remains unchanged, the amount of gain that qualifies for the relief is being reduced.
Currently, individuals can benefit from BADR on up to £1 million of qualifying gains during their lifetime. However, for disposals made on or after 6 April 2027, this lifetime limit will be reduced to £500,000.
The financial impact could be substantial.
For example, a higher-rate taxpayer who realises a qualifying gain of £1 million currently benefits from the lower 18% tax rate on the full amount. From April 2027, only the first £500,000 will qualify for BADR, with the remaining £500,000 potentially taxed at the standard CGT rate. This could result in an additional tax bill of approximately £30,000.
Timing Could Be Critical
For business owners already considering retirement or a sale, timing may become increasingly important.
The difference of a few months could result in a significant variation in tax liabilities, particularly where gains exceed £500,000.
However, attempting to rush transactions solely to secure the higher lifetime allowance may not always be effective.
The Government has introduced anti-avoidance measures covering situations such as:
- Contracts entered into before 6 April 2027 that complete later.
- Certain company share reorganisations.
- Transactions designed primarily to secure the higher relief limit.
As a result, business owners should seek professional advice before accelerating sale plans or restructuring arrangements.
A New Opportunity: Founders’ Relief
Alongside the reduction in BADR, the Government has proposed a new relief aimed at supporting business founders and early investors.
The proposed Founders’ Relief would apply a significantly reduced CGT rate of just 10% on qualifying disposals of shares from 6 April 2027.
This rate is highly attractive and could provide a valuable incentive for entrepreneurs building innovative, high-growth businesses.
Unlike BADR, however, Founders’ Relief is targeted at a relatively narrow group of qualifying individuals and businesses.
Who Could Qualify?
Under the current proposals, individuals would generally need to:
- Operate their business through a limited company.
- Have owned at least 25% of the shares when the business commenced.
- Have held the shares continuously for at least five years.
- Have been UK resident for a minimum of five years. In addition, the company itself would need to satisfy several stringent conditions.
The business would generally need to:
- Be actively trading.
- Have a substantial UK presence.
- Generate annual turnover of at least £10 million.
- Employ at least 15 full-time employees.
- Meet specific innovation and growth criteria.
The relief carries a potential lifetime limit of up to £10 million depending on circumstances, making it particularly attractive for founders of successful scale-up businesses.
Residential Property Owners
The Budget also contains an important administrative change affecting residential property disposals.
Individuals selling a UK residential property that is not their main residence are generally required to report the disposal and pay any Capital Gains Tax due within 60 days of completion. Failure to do so can result in penalties and interest charges.
The Government has acknowledged an issue within the current legislation that can result in late filing penalties continuing to accrue even after the disposal has been included on a Self Assessment tax return.
From 28 October 2026, the rules will be changed so that late filing penalties cease accruing once the disposal has been reported through Self Assessment.
While this represents a welcome simplification, property owners should still aim to meet the 60-day reporting deadline wherever possible.
Changes to Cryptoasset Taxation
As cryptoassets become increasingly mainstream, the Government continues to refine their tax treatment.
One area attracting particular attention is stablecoins.
Stablecoins are digital assets designed to maintain a stable value by linking to traditional currencies such as the US dollar. Under current rules, they are largely taxed in the same way as other cryptoassets, meaning that gains or losses may arise when they are disposed of or exchanged.
From April 2027, eligible stablecoins will be treated more like conventional money for tax purposes.
This means:
- Individuals and trustees will generally no longer pay Capital Gains Tax on disposals of qualifying stablecoins.
- Interest-like returns received from stablecoins will instead be treated as savings income.
- Certain withholding tax obligations may apply.
For investors holding stablecoins as part of a broader digital asset strategy, this may significantly alter the way transactions are taxed.
Crypto Lending and Liquidity Pools
Further changes are also planned for individuals participating in crypto lending arrangements and liquidity pools.
Currently, transferring cryptoassets into certain arrangements can potentially trigger a taxable event.
From 6 April 2027, qualifying transfers into and out of approved lending arrangements and liquidity pools will generally no longer result in an immediate gain or loss for tax purposes. Instead, taxation will usually arise only when the cryptoassets are genuinely disposed of or exchanged.
This change is intended to provide greater certainty and align the tax treatment more closely with the underlying economic reality.
What Should You Do Now?
Although some of these changes do not take effect until April 2027, early planning remains essential.
Business owners, investors and property owners should consider:
✅ Reviewing business exit and succession plans.
✅ Assessing whether BADR remains available and beneficial.
✅ Determining whether Founders’ Relief may apply to future company sales.
✅ Reviewing residential property reporting procedures.
✅ Assessing the impact of the forthcoming cryptoasset reforms.
✅ Seeking professional advice before undertaking major transactions.
Final Thoughts
The 2026 Budget may not have increased Capital Gains Tax rates, but the changes to reliefs and qualifying rules could still have a significant financial impact.
For business owners considering retirement, entrepreneurs planning an eventual exit, and investors holding property or cryptoassets, understanding these developments now could help avoid unexpected tax costs later.
At Bryden Johnson, we work with business owners, directors and investors to help them structure transactions efficiently, plan ahead and make informed decisions. If you are considering selling a business, disposing of assets or reviewing your long-term tax planning strategy, our team would be happy to help.
📞 Contact Bryden Johnson on 0208 686 0255 to discuss your circumstances and explore the options available to you.