Being able to claim business asset disposal relief (BADR) on trading company shares is a very valuable relief – potentially worth up to £100,000. However, it is only recently that shareholders have been afforded protection in circumstances where their holdings have been diluted. In this article, we look at how the dilution protection elections work.

Consider the situation where a minority shareholder in a trading company has always owned enough shares (more than 5% of the ordinary share capital and voting rights) to ensure that BADR will apply to any sale as long as the other conditions are met.