Tax and timing

The price is the headline; what you keep is the point. For most owners selling a UK advice firm the tax question comes down to capital gains tax and whether Business Asset Disposal Relief applies to some or all of the gain. The relief carries a lifetime limit of £1m of qualifying gains, which for a good many firms means part of the gain is relieved and the rest is not. Everything after that is a question of rate, and the rate has been moving.

Business Asset Disposal Relief charged 10% on qualifying gains until April 2025. It rose to 14% for the 2025-26 tax year, and to 18% from Mon 6th Apr 2026, which is the rate that applies in the 2026-27 year this guide is written for. Gains above the lifetime limit are taxed at the main capital gains rates instead. Two owners completing the same deal a year apart can therefore keep meaningfully different amounts, which is why timing belongs in the same conversation as price rather than in a conversation after it.

Structure moves the bill as much as timing does. A share sale and an asset sale are taxed differently, and an asset sale can leave money sitting inside a company that then has to be extracted, which is a second tax event rather than a footnote. Deferred consideration adds its own complication: depending on how the earn-out is drafted, you can be taxed on value you have not yet received and may never receive, and an earn-out whose amount cannot be fixed at completion is not treated the same way as a known sum paid late.

None of this argues for rushing a deal to catch a rate, or for holding one back in hope of a better one. It argues for knowing the position before you agree terms, because the structure is settled in heads of terms and is expensive to reopen afterwards. The order that works is simple: understand the tax treatment of each shape, then negotiate the shape, then negotiate the number.

This guide is information rather than advice. Rates and rules change, individual circumstances change the answer, and nothing written here is a substitute for a conversation with an accountant or tax adviser who can see your actual figures. The articles below explain each part in plain terms, so that when you have that conversation it starts further along than it otherwise would.