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Putting the ‘bad’ into BAD relief
Key points
- The upcoming Budget may herald the end of business asset disposal relief.
- The scarce independent research on BADR and its predecessor entrepreneurs’ relief shows that the relief does little to encourage entrepreneurial behaviour – its whole reason of being.
- BADR remains broadly focused on the same transactions as its predecessor entrepreneurs’ relief.
- Due to the accumulation of additional legislative provisions BADR is now a complex CGT relief – arguably disproportionately so since it provides a maximum lifetime tax saving of £100 000.
- BADR costs approximately £1.5bn annually potentially placing it squarely in the sights of the chancellor as a relief the country ‘cannot afford’.
- The scrapping of BADR would likely have more of a disproportionate impact on owners of smaller businesses.
The clue is in the title for business asset disposal relief. When entrepreneurs’ relief was rebranded in legislation introduced in 2020 as ‘BAD relief’...
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