As we head into 2026/27, it should be remembered that, for most sales of capital assets, CGT will apply at 18% for basic rate taxpayers and 24% otherwise. The rate of CGT for business asset disposal relief (BADR) purposes will increase from 14% to 18% from 6 April 2026.

Particularly in relation to business disposals, timing is important, so please do talk to us about optimising your tax position prior to any capital disposal.

There were a couple of significant changes for CGT in the Budget on 26 November.

Employee Ownership Trusts

With immediate effect, the CGT relief on disposals into an Employee Ownership Trust has been halved from 100% to 50%. This means 50% of the gain will be treated as chargeable. The remaining 50% of the gain will not be chargeable at the time of the disposal but will continue to be held over to come into charge on any future disposal of the shares by the trustees.

A further sting in the tail is the chargeable element of the gain will be excluded for BADR and investors’ relief (IR) purposes so tax will be payable at the full rate.

Incorporation relief

For transfers of a business on or after 6 April 2026, a claim for incorporation relief will be required.

Incorporation relief applies to individuals, partners in a partnership and trustees where a business is transferred to a company in exchange for shares.

Claims for the relief have previously been automatic with the ability to elect out. From 6 April 2026, claimants must include a claim in their self assessment tax return for the tax year of transfer. They must provide brief details of the transaction, the relevant tax computations and the type of business transferred.