With the upcoming changes to Business Asset Disposal Relief (BADR) coming into effect from 6 April 2026 it might be time to bring forward any plans for a Members Voluntary Liquidation (MVL).
BADR is a significant tax relief available to businesses eligible to claim it, the benefit of claiming BADR is that it can massively reduce any capital gains tax due when extracting money from your business through an MVL. The potential savings are more pronounced for any businesses that are “cash rich”.
However, from 6 April 2026 the Capital Gains Tax rates available under BADR are going to be changing from 14% to 18%. The result is that going through an MVL and claiming BADR is going to become less efficient. While it is still more beneficial to go through this route, should you choose it after 6 April 2026 you will not be gaining as much from it.
If you are looking to make use of an MVL, and take advantage of the BADR relief, we would advise to move up any plans before the changes come into effect.
Should you need any guidance on and MVL and BADR or simply would like some further information please get in touch with us.
