BADR advanced rules

In this lesson

1. 0:00 Lesson 25 CGT reliefs overview
2. 0:44 Business asset disposal relief fundamentals
3. 1:16 Goodwill and close company restrictions
4. 3:06 Associated disposals and personal assets
5. 4:05 Rent charged on personal assets

About this lesson

You'll discover why goodwill transfers to close companies can disqualify relief, the 28-day exception for selling shares onwards, and how associated disposals work when you sell personal assets used by your business alongside your business interest. Understanding these rules is essential for ATX and your exam, as they directly affect how much tax you'll pay on business disposals and require careful planning to maximise relief. The lesson covers the core restriction: BADR isn't available if you transfer your business to a close company (five or fewer shareholders) and retain more than 5% ownership, because HMRC views this as transferring the business to yourself. However, this restriction is lifted if you sell those shares to an unconnected company within 28 days of acquiring them, or if you're a retiring partner. You'll also explore associated disposals — when you sell a personal asset (like property) used by your business alongside your business interest, both can qualify for relief, provided you've owned the asset for at least two years and haven't charged the business market rent. If rent is charged at market value, relief is lost; if below market value, relief is restricted.

Duration: 4m