Timing your business sale – November 2025 vs June 2026 – what’s the financial difference

Business owners looking to sell their business will face higher tax rates from April of next year – so could it be worth considering bringing a planned sale forward?

At a glance 

• Selling before April 2026 could offer tax advantages under the current BADR rate.
• Shareholders may retain more from the sale by completing a transaction ahead of the changes.
• The decision should weigh tax efficiency against wider considers such as market conditions, buyer readiness, and long-term strategic goals.

When selling a business, timing can significantly influence the net proceeds shareholders receive, particularly when tax rates are changing. With the UK government set to increase the Business Asset Disposal Relief (BADR) rate from 14% to 18% in April 2026, business owners planning an exit should carefully weigh up the financial impact of selling before or after this change.  

Martin Brown, CEO of Elephants Child, a business growth advisory firm, explores a real-world example to show the financial implications of selling a business in November 2025 versus June 2026.

The scenario

• Sale price: £6,000,000
• Shareholders: Two individuals, each owning 50%
• Shareholding duration: Five years (qualifying for BADR)
• Transaction costs:
  Legal: £60,000
  Accountancy: £30,000
  Corporate finance: £35,000 fixed + 3.5% success fee (£210,000)
• Total costs: £335,000
• BADR allowance: £1,000,000 per shareholder
• CGT rates:
  Nov 2025: 14% on BADR, 24% on remaining gains
  June 2026: 18% on BADR, 24% on remaining gains

November 2025 sale: Lower BADR rate

Step 1: Net proceeds before tax gross sale price: £6,000,000. Less transaction costs: £335,000. Net before tax: £5,665,000.

Step 2: Capital Gains Tax (CGT) Each shareholder receives £3,000,000.

• First £1,000,000 taxed at 14% = £140,000
• Remaining £2,000,000 taxed at 24% = £480,000
• Total CGT per shareholder = £620,000
• Total CGT for both = £1,240,000

Step 3: Final net proceeds £5,665,000 – £1,240,000 = £4,425,000 Each shareholder receives £2,212,500.

June 2026 sale: Higher BADR rate

Step 1: Net proceeds before tax – Same as above: £5,665,000.

Step 2: CGT: Each shareholder still receives £3,000,000.

• First £1,000,000 taxed at 18% = £180,000
• Remaining £2,000,000 taxed at 24% = £480,000
• Total CGT per shareholder = £660,000
• Total CGT for both = £1,320,000

Step 3: Final net proceeds £5,665,000 – £1,320,000 = £4,345,000. Each shareholder receives: £2,172,500.

Side-by-side comparison

Timing matters

Selling the business in November 2025 results in £80,000 more in net proceeds compared to selling in June 2026, due to the lower BADR rate of 14%. Each shareholder would personally retain £40,000 more by selling before the April 2026 tax change.

While the difference may not be transformative, it’s certainly meaningful – especially for shareholders looking to maximise post-sale returns. If your business is ready for sale and you qualify for BADR, completing the transaction before the rate increase could be a financially prudent move.

However, timing should also consider market conditions, buyer readiness, and strategic goals. Tax efficiency is important, but it’s just one factor in a successful exit strategy. We’re doing more and more calculations currently analysing the impact of forthcoming changes to help business owners to understand what it means for them. Our work with business owners over the years has shown us just how different each sale can be and the importance of a bespoke strategy for each business and even each owner.

Ready to explore your options?

With the next budget pending, what is the value of your business and how do you realise it or grow it?

Understanding your business’s value and timing the right exit are critical to maximising returns. Speak to us today about how forthcoming tax changes could affect your plans.

We work in conjunction with an extensive network of external growth advisers and SME specialists, such as Elephants Child, who have been carefully selected by St. James’s Place. The services provided by these specialists are separate and distinct to the services carried out by St. James’s Place and include advice on how to grow your business and prepare your business for sale and exit.

Where the opinions of third parties are offered, these may not necessarily reflect those of St. James’s Place.

The levels and bases of taxation, and reliefs from taxation, can change at any time. The value of any tax relief depends on individual circumstances.

SJP Approved 02/10/2025