Exit planning: keep more of what your business is worth

It is the work of arranging your company, your shareholdings and your own finances so that, when a sale happens, the tax cost is as low as the law allows and the structure is clean for a buyer. It covers reliefs such as Business Asset Disposal Relief, the position of surplus cash and property, who owns the shares, and what happens to the proceeds afterwards.

It reduces capital gains tax on the sale of a qualifying business. From 6 April 2026 the rate is 18% on up to £1 million of lifetime qualifying gains, up from 14% in 2025/26 and 10% before 6 April 2025. Gains above the limit are taxed at the normal rates of 18% within the basic rate band and 24% above it.

For the two years before the sale, the company must be a trading company or the holding company of a trading group, you must be an officer or employee, and you must hold at least 5% of the ordinary shares with at least 5% of the votes and economic rights. Holders of qualifying EMI shares have a special rule on the 5% test.

At 18%, the relief saves up to 6 percentage points on gains taxed at 24%, so a maximum of £60,000 per person on the £1 million lifetime limit. If your gain falls within the basic rate band, the saving is smaller or nil, because the normal rate is also 18%. The relief therefore matters less than it did when the rate was 10%, but still counts.

You claim on your Self Assessment return or through a separate claim form. The deadline is the first anniversary of 31 January following the tax year of the sale. For a sale in 2026/27, that is 31 January 2029. We recommend claiming with the return, and keeping evidence of your role, shareholding and the company's trading activity ready.

Review the shareholdings and who qualifies for reliefs, clear out non-trading assets, extract surplus cash in a tax-efficient way, tidy director loan accounts and address any open HMRC points. If a holding company or demerger is needed, it needs time for clearance. Doing these things early gives buyers a clean company and gives you more options.

A company with large cash reserves or investments can risk being treated as not wholly trading, which can threaten reliefs such as Business Asset Disposal Relief. Buyers will also pay pound for pound for cash. Extracting it beforehand may be taxed as a dividend, so the sums need modelling. In some cases, moving it up to a holding company is a better route.

Sometimes. Transfers between spouses and civil partners are generally made at no gain and no loss, and a second person may use their own £1 million relief limit and basic rate band. The spouse must genuinely qualify, meeting the 5% and officer or employee tests throughout the two years before the sale, and the gift must be real. A binding sale already agreed makes such a transfer much harder.

If a company holds at least 10% of a trading company for a continuous 12 months in the six years before a sale, its gain on selling that holding can be exempt. That is why selling a subsidiary through a holding company can produce a tax-free sale at company level. The proceeds then need to reach you, which is taxed differently, so we plan both steps.

For disposals to the trustees of an EOT on or after 26 November 2025, 50% of the gain is chargeable at the time of sale and the other half is relieved. Business Asset Disposal Relief cannot be claimed on that disposal. EOTs can still suit some owners, but the full exemption many people remember no longer applies. We compare it with a trade sale and a management buy-out.

They typically review corporation tax, VAT, PAYE and benefits, director loans, past enquiries and the way reliefs have been claimed, including any R&D claims. Problems normally lead to price reductions, retentions or specific indemnities. Reviewing the same points yourself in advance usually costs far less than fixing them under deal pressure.

For a sale of shares by an individual, capital gains tax is normally reported on the Self Assessment return and paid by 31 January following the end of the tax year of the sale. A sale in autumn 2026 therefore falls in 2026/27 with payment by 31 January 2028. Deferred and earn-out payments can change the timing, so the contract wording matters.

It gives a quick comparison of what you might keep from different routes, such as a trade sale, a management buy-out or a sale to an EOT, using current tax rates. It is a guide for early thinking, not advice. Real outcomes depend on your shareholdings, reliefs, deal terms and other income, which we model with you on a call.

Yes, but the reliefs may be different. A minority shareholder who holds less than 5% cannot claim Business Asset Disposal Relief, and may be selling alongside a majority holder's terms. Planning then focuses on the rate that applies, the use of allowances, shares held by a spouse and the terms of the shareholders' agreement.

Keep records showing your shareholding and voting rights over the two years, your role as director, officer or employee, and the company's trading activity throughout that time. Statutory books, filed accounts, share registers, contracts and payroll records all help. If HMRC reviews the claim years later, being able to show these facts quickly is what protects the relief.

Exit planning is the preparation, usually over the years before a deal, covering structure, reliefs and positioning. Transaction tax advice is the deal itself: negotiating the structure, warranties, clearances and completion. We do both, and for the deal-specific side we link to our Transaction Tax pages, which cover sale routes and tax in detail.