The Autumn Budget 2026, presented on 28 October 2026, delivered mixed news for entrepreneurs regarding Capital Gains Tax (CGT). A new Founders’ Relief has been created to incentivise innovation, offering a reduced CGT rate on qualifying gains from the disposal of shares in innovative companies founded by the taxpayer. However, this is counterbalanced by a reduction in the Business Asset Disposal Relief (BADR) lifetime limit from £1 million to £500,000, effectively halving the amount of gains eligible for the 10% rate. The changes take effect from 6 April 2027 for BADR and from a later date for Founders’ Relief, subject to consultation on the definition of ‘innovative company’. Founders and investors must recalibrate exit strategies and consider the timing of disposals to optimise tax outcomes.
Key Takeaways
- Founders’ Relief Introduction: A new targeted relief for founders of innovative companies, potentially offering a lower CGT rate on qualifying disposals, subject to detailed qualifying criteria.
- BADR Limit Halved: The lifetime limit for Business Asset Disposal Relief drops to £500,000, significantly reducing the tax advantage for serial entrepreneurs and business owners planning exits.
- Strategic Timing: Taxpayers with gains approaching the old £1 million limit should consider accelerating disposals before April 2027 to lock in the higher allowance.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement