What happens to the tax when I sell my vet practice to a corporate?

The gain is taxed at 18% on the first £1 million where Business Asset Disposal Relief applies, and 24% above that for a higher rate taxpayer. Payments that come later are taxed in one of two ways. A fixed deferred payment is taxed in full at the sale. An earn-out that cannot be valued is taxed at the sale on an estimated value, and the later payments are taxed again without the relief.

How later payments are taxed

A fixed deferred payment
Where the amount is known, or can be worked out from events that have already happened, it is taxed in full at the date of the sale, without a discount for waiting.
Paying the tax by instalments
Where the payments run for more than 18 months, the tax can be paid in instalments over up to eight years.
An earn-out
Where the amount depends on future profits, the right to it is valued and taxed at the sale. Each later payment is a further disposal of that right, and it does not get Business Asset Disposal Relief.

HMRC Capital Gains Manual CG14881, CG14910 and CG14970. Checked 13 October 2026. 2026/27 rules. The Budget on 28 October 2026 can change them.

The rates

gov.uk, capital gains tax rates and allowances. Checked 13 October 2026. 2026/27 rules. The Budget on 28 October 2026 can change them.

Tax on selling a businessCalculator

Later payments under an earn-out do not get Business Asset Disposal Relief.

Related questions

Is an earn-out taxed when I receive it?

The estimated value of the right is taxed at the sale, and each payment received later is taxed as a disposal of that right.

Can I spread the tax on a deferred payment?

Where the payments run for more than 18 months, the tax can be paid by instalments over up to eight years.

Where this fits

We advise on investing the proceeds of a practice sale as the payments arrive.

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The advisers for this subject

Sunny Bharj

Sunny Bharj

Independent Financial Adviser

Tony Springer

Tony Springer

Independent Financial Adviser

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