Yes — you’ve got the right numbers.
The Business Asset Disposal Relief rate is 18% for qualifying disposals on or after 6 April 2025 (it was previously 10%), and the £1 million lifetime limit still applies. That limit is per individual, across all disposals ever — so if you’ve claimed before, only what’s left of the £1m is available.
The conditions that matter in practice for a share sale:
- you’ve held the shares for at least 2 years, ending on the disposal date;
- throughout that period you’ve held at least 5% of the company’s ordinary shares and 5% of the voting rights;
- the company is your personal company and is a trading company (or the holding company of a trading group) — and must have been for the full 2 years.
Things people commonly get wrong:
- Dilution. If a funding round drops you below 5%, the 2-year clock can effectively restart. There are special rules that can preserve relief after dilution, but they need an election — don’t ignore this.
- The company must still be trading at disposal. If it goes dormant or becomes an investment vehicle before you sell, relief can be lost.
- Gains above the £1m limit are taxed at the normal capital gains tax rates, not 18%.
- Paperwork. Check the share register and transfer history — the 2-year and 5% tests are measured on actual ownership dates, and HMRC do test them.
You claim the relief on your Self Assessment tax return for the year of disposal. Since you’re planning 1–2 years out, it’s worth getting your accountant to check the shareholding history and the company’s trading status now — most failed claims come down to the 5% or the 2-year test, and both are fixable with time.
