Sunny Bharj
Independent Financial Adviser
Tony Springer
Independent Financial Adviser
Since 6 April 2026 the relief on selling a business is 18%, and the inheritance tax relief on passing one on is capped at £2.5 million.
Both rules changed in April 2026, and both change what to do in the years before you sell or hand over. A sale now costs more in tax than it did two years ago, and a large business passed on at death can face an inheritance tax bill it would not have faced before.
Your accountant works out the tax on the deal. We work on what happens to the money afterwards and on what to do with the company's money before the sale.
gov.uk and Finance Act 2026, checked 2 October 2026. 2026/27 rules. The Budget on 28 October 2026 can change any of them.
A contribution from the company into your pension is normally deductible for corporation tax and is not taxed on you. Up to £60,000 a year counts towards the annual allowance, plus unused allowance from the three previous years.
Business Asset Disposal Relief applies to £1 million of qualifying gains across your whole life. Gains you have already claimed it on reduce what is left.
A spouse or civil partner who qualifies has a £1 million limit of their own. Whether they qualify depends on conditions your accountant checks.
18% on qualifying gains up to the £1 million lifetime limit under Business Asset Disposal Relief, from 6 April 2026. Above that, 24% for a higher or additional rate taxpayer.
From 6 April 2026, qualifying business and agricultural property gets 100% relief on the first £2.5 million combined and 50% above that.
A company contribution before the sale reduces the company's corporation tax and moves money into your pension without tax on you, within the annual allowance and carry forward.
Tax treatment depends on your circumstances and on current rules, which can change. The Financial Conduct Authority does not regulate tax advice. The value of investments can fall as well as rise.
On a £1,500,000 gain, about £299,280 for a higher rate taxpayer with the full relief available.
Read the answer →From April 2026, 100% relief on the first £2.5 million of business and farm property and 50% above.
Read the answer →Independent Financial Adviser
Independent Financial Adviser
A first conversation of about twenty minutes, at no cost to you. Tell us what is on your mind: a pension you have lost track of, a fixed rate ending, a will you keep meaning to write.