Joe Brough considers the tax implications and pitfalls when disposing of shares on retirement.
As retirement approaches, owner-managers will begin to contemplate ways of realising their investment, and the exit routes that are available.
Business asset disposal relief
The traditional exit route for most business owners is to dispose of their shares either to an external buyer or via a management buy-out, before banking the disposal proceeds and riding off into the sunset.
A key requirement when disposing of their shares disposals will be securing capital gains tax (CGT) business asset disposal relief (BADR), the availability of which will directly impact the level of post-tax proceeds. For disposals taking place in 2025/26, the first £1m of qualifying gains are taxed at 14%, with post-5 April 2026 BADR gains taxable at 18%.
