Business Asset Disposal Relief (“BADR”) – (in old money known as Entrepreneurs’ Relief) may be available to company shareholders who wish to wind-up their solvent company via a Members’Voluntary Liquidation (“MVL”) process. This is a long-standing method to reduce the standard capital gains tax paid to a rate of 10%. At PBC we advise and formally act in MVL’s to assist business owners to maximise their return(and pay less tax) in conjunction with the company’s accountants.
There is always speculation pre budget that BADR will either be scrapped or reduced – the most recent reduction was in the March 2020 budget which changed the lifetime relief capped from £10 million to £1million. Since then, BADR has not been changed. However, given the level of Government support since Covid, is BADR an easy target for further scrutiny?
The next budget is scheduled for 15 March 2023 and, whilst the view is BADR will not be scrapped altogether, it may be that further reductions/restrictions could be in the offing.
If you are a company owner or advisor to the company and wish to discuss an MVL in more detail, please call PBC on 01604 212150 or email email@example.com.