How Will the BADR Tax Relief Changes Affect Me? Guidance for Dental Practice Owners
We discuss the tax relief changes for dental practice owners thinking of selling in the near future
BADR (Business Asset Disposal Relief), previously known as Entrepreneurs’ Relief, is a UK tax relief designed to reduce the capital gains tax (CGT) when selling all or part of a business.
On 6 April 2025, BADR increased from 10% to 14% as part of the Budget.
BADR is set to increase another 4% from 6 April 2026 to 18%, impacting tax bills from any asset disposals, such as a dental practice sale.
Owners planning to sell a practice with substantial goodwill, property, or equipment will face increased tax liabilities in the next financial year. As net proceeds from selling a practice will decrease, this could impact any retirement plans or reinvestments you’ve been considering.
What to do next
You may consider bringing your sale forward to avoid the tax rises. Or you may decide to change your exit strategy given the potential impact.
If you’re considering selling your practice in the near future, it’s crucial to act now and get an up-to-date valuation to understand how much you stand to lose based on the higher tax thresholds.
Practice sales can be a complex process with the average sale taking 6-9 months to complete. Acting sooner rather than later will therefore put you in the best position to achieve a successful sale outcome ahead of the tax changes, thereby maximising your sale proceeds