The rate for business asset disposal relief (BADR) and investors' relief will increase 4% from the current 10% to a standard rate of 14% from 6 April 2025 before increasing again the following year to equalise with the main lower rate of 18% capital gains tax from 6 April 2026.

Under the current system, business asset disposal relief is a 10% tax charge on all gains on qualifying assets when a business is sold as long as it has been owned for a minimum of two years.

There had been some expectations the relief would be completely abolished as it is has been chipped away at by successive Chancellors ever since it was renamed from entrepreneurs relief.