The New Rate Is Live: What April Changed for Electrical Owners

The RateThe rate that applies from today, in cash

Business Asset Disposal Relief is 18% from today, on qualifying gains up to a £1m lifetime limit. Until 5 April 2026 it was 14%, and the step was announced at the Autumn Budget on 30 October 2024, so nothing about it is a surprise and nothing about it is negotiable. The main Capital Gains Tax rate for higher rate taxpayers remains 24%.

In cash, on a full £1m of qualifying gains, the relief is now worth up to £60,000 against the main rate. That is a real number and it is smaller than the number most owners were told to worry about, because the comparison that generates the headline is the step itself rather than the relief that remains. Both figures are true and they are answers to different questions.

The completion date still governs, which matters for anybody mid-process. A deal agreed in February and completed in May is taxed at today's rate, not at the one that applied when the price was agreed. If that changes the arithmetic of a transaction you are already in, raise it with your own tax adviser now rather than at completion. It is also a reminder that the qualifying conditions run on their own clock: two years of holding the shares and of the officer or employee relationship, tested at the date of disposal.

The Other ChangeThe inheritance tax change that arrived alongside it

From this month, 100% agricultural and business property relief is capped at the first £2.5m of combined qualifying assets, with 50% relief above that, which is an effective inheritance tax rate of 20% on the excess. The cap was announced at £1m and raised to £2.5m on 23 December 2025, so a good deal of the commentary written before Christmas still refers to the lower figure.

The allowance is transferable between spouses and civil partners, which takes a couple to £5m of qualifying assets at full relief. HMRC estimate that around 1,100 estates a year will pay more as a result. That is a small number nationally and it includes a recognisable type of business: the owner-managed contractor worth several million that was always going to pass to the next generation rather than be sold.

For an electrical business owner the practical effect is that passing the business on at death is no longer the automatically efficient route it was widely assumed to be. That is a matter for your own tax adviser and your own circumstances, and it belongs in the conversation about whether to sell, pass on or carry on, rather than being left out of it because nobody raised it.

What It ChangesWhy this changes preparation more than it changes timing

The rate is now fixed and applies to everybody equally, which removes the one variable owners have spent eighteen months trying to time. What is left is the part that was always doing the heavy lifting: the proportion of your revenue that recurs, the state of your records, the depth and grading of your team, and how much of it still depends on you being there.

Those things move a valuation by a multiple of anything a four point rate change does. A business that sells for half a turn of EBITDA more because its testing book is documented and its team is retained has gained considerably more than the tax step took, and unlike the rate, it is entirely within your control. Half a turn on a business earning four hundred thousand is two hundred thousand pounds, which puts the rate change into proportion. That is not a consolation. It is the correct order of priorities, and it was the correct order before April as well.

The rate is the same for everybody now. What is left is the part that was always doing the heavy lifting.