The 6 April 2027 Line: What the Relief Cut Means for a Sale You Haven't Started

A Five-Question Test for Owners Deciding Whether to Sell Before April

Introduction

If you own a trading company and expect to sell it in the next few years, the Budget on 28 October gave you a date. From 6 April 2027, the lifetime limit on Business Asset Disposal Relief halves, from £1m to £500,000.

That leaves about five months. For some owners, completing a sale before then is worth planning for now. For many more, chasing the date would cost more than it saves.

This guide sets out what changed, who it affects, what it is worth in pounds, why a contract signed before April may not protect the old limit, and a five-question test for deciding which side of the date your sale belongs on. It ends with the new Founders' Relief, which may make waiting the better choice for a small number of owners.

What Changed

Business Asset Disposal Relief lowers the capital gains tax you pay when you sell your business, or shares in your own trading company. HMRC's policy paper of 29 October 2026 confirms the change, which is to be legislated in the Finance Bill 2026.

The main rates of 18% and 24% depend on your income. Relief claimed on earlier sales counts towards the limit.

Insight: The rate stays where it is. Only the amount of gain it applies to shrinks.

Who Is Affected

You're affected if both of these are true for you as an individual:

• Your gain on the sale is likely to be more than £500,000.
• You have more than £500,000 of the limit left, after any relief you've claimed in the past.

You're not affected if your expected gain is £500,000 or less, or if you've already used your full £1m.

Each shareholder has a separate limit. A business owned equally by two people has two limits, and the change can apply to each.

HMRC estimates that about three-quarters of the roughly 51,000 people who claim the relief will still receive it on their whole gain. Around 13,000 will pay more.

What It’s Worth: The £30,000 Ceiling

The most the change can cost one person is £30,000: the £500,000 that drops out of the limit, taxed at 24% instead of 18%.

The table assumes a higher-rate taxpayer with no relief claimed before.

Above £1m, the extra tax stays at £30,000 however large the gain. Two equal shareholders with £2m gains each would pay £60,000 more between them by selling after April. On a sale at around £4m, that is about 1.5% of the price.

Insight: For a sale worth several million pounds, April is worth a small percentage of the price per shareholder. A lower offer or weaker terms from a rushed process can cost more than that.

Why a Contract Signed Before April May Not Count

It's tempting to sign the sale contract before 6 April and complete later. HMRC's new rules close that route for most sellers.

Where an unconditional contract is signed before 6 April 2027 but the sale completes on or after it, the gain is held to the £500,000 limit unless:

• The parties can show they didn't enter the contract to gain a tax advantage from the timing.
• Where buyer and seller are connected, such as a family member or a company you control, the contract was entered into for wholly commercial reasons.

Where either applies and the gain is over £100,000, a statement must also be made.

A separate rule covers sales that involve swapping your shares for shares in another company, or reorganising them, where you elect to claim the relief. If that election is made on or after 6 April 2027, the new limit applies.

Insight: If April matters to you, plan around completing the sale before 6 April. Take tax advice on the timetable before you agree heads of terms (the short document that sets out the main terms of the deal).

What Has to Happen Before 6 April

A sale that completes before April has to fit every stage into the next five months:

• Finding the buyer. Either a buyer already in view, or a search that reaches more than one serious candidate.
• Agreeing the offer and heads of terms. The price, how and when it's paid, and what the buyer expects from you after the sale.
• Due diligence. The buyer's detailed checks of your accounts, contracts, staff, property and systems. Problems found here can reopen the price.
• Legal documents. The sale agreement, the promises you make about the business, and the disclosures against them, drafted and negotiated by both sides' solicitors.

Each stage waits on the one before. For a business that's ready, with clean accounts, written contracts and a team that runs the day-to-day, five months is tight but possible. For an unprepared business starting from scratch, five months is short.

The market itself gives no reason to hurry. Alinea's quarterly review, using MarktoMarket data, recorded 1,414 UK deals in July to September 2026, and deals up to £50m made up 61% of those with a disclosed value. Buyers for owner-managed businesses remain active.

Borrowing has become dearer for buyers who fund purchases with debt: on 5 November the Bank of England raised Bank Rate to 4%, its first rise since 2023. That affects some buyers more than others, and it is one more reason to know who your likely buyers are before you set a sale timetable.

The Five-Question Test

Work through these with your co-shareholders and your accountant.

1. Does April change your tax at all? Is your expected gain, per shareholder, above £500,000, with more than £500,000 of relief still unused? If not, the date doesn't affect you. Sell when you're ready.
2. Is a buyer already in view? A business that has approached you, or one that is an obvious fit and likely to move quickly. Without one, finding a buyer could use much of the five months between now and April on its own. Especially with Christmas around the corner.
3. Would your business stand up to due diligence today? Look at the points buyers check most closely: up-to-date accounts, written contracts with your main customers and suppliers, how much of your revenue comes from a few customers, and whether the business runs without you.
4. Would a hurried timetable weaken your sale price? For example, if a strong trading year is about to show in your accounts, or if your price depends on more than one buyer competing.
5. Could you qualify for Founders' Relief after April? If there's any chance, check before setting a timetable. The next section explains why.

Reading your answers. If question 1 is yes, questions 2 and 3 are yes, and questions 4 and 5 are no, plan for completion before 6 April and start this month. Any other combination points to preparing properly and selling when you, and the business, are ready.

Founders' Relief: When Waiting May Pay More

The Budget also announced Founders' Relief: a 10% rate on up to £10m of lifetime gains, for qualifying disposals on or after 6 April 2027. HMRC expects about 600 people a year to qualify.

As proposed, you would need to have:

• Held 25% of the shares when the company started trading.
• Held them for at least five tax years before the sale.
• Been UK resident for at least five continuous tax years before the sale.

The company would need turnover of at least £10m and at least 15 full-time equivalent staff in its accounts for the year before the sale. It would also need to meet two of three further tests:

• Turnover growing by an average of 25% a year over three consecutive years at some point in the ten years before the sale, from a starting point of at least £10m.
• Staff numbers growing by an average of 25% a year over three consecutive years in the same ten years, from a starting point of at least 15.
• At least £1.5m of research and development spending qualifying for tax relief, claimed for a period ending in the three years before the sale.

Land dealing, financial services and property development are among the trades excluded.

The rules are out to consultation until 30 November 2026 and may change. The £10m limit is reduced by any Business Asset Disposal Relief you claim from 6 April 2027.

Insight: For the few who qualify, selling before April could mean paying 18% on £1m instead of 10% on a much larger gain, once the new rule is enacted. Check eligibility with your tax adviser before you commit to a date.

What to Do This Month

• Get your own figure. Ask your accountant for your expected gain, any relief already used, and the difference April makes for each shareholder.
• Agree a direction with your co-shareholders. Use the five questions, and decide which side of April you're on.
• If you aim for April, appoint your advisers now, prepare the information a buyer will ask for, and set a point at which you let the date go if the deal is off track.
• If you don't, use the time on the preparation that holds your sale price: the issues buyers look at most closely, fixed before any buyer sees them.

Choosing Your Side of the Date

The April change is fixed and the saving is capped at £30,000 a person. For owners with a buyer in view and a business ready for due diligence, it's worth planning for now. For most others, the next five months are better spent preparing a business that sells well whenever it goes to market.

If you'd like help working out which side of April your sale belongs on, and what a buyer would look at most closely in your business, we'd be glad to talk it through.

Sources referenced include HMRC policy papers and an HM Treasury consultation published at Budget 2026, the Bank of England's November 2026 Monetary Policy Summary, and Alinea's Autumn 2026 M&A review.

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Exit Strategy & Solutions Ltd is not authorised or regulated by the FCA. We do not give legal, tax, insurance or regulated financial advice.

This is general information, not advice on your own circumstances.