What changed in the Budget
Presenting his first budget, John Healey said he wants to tweak who pays what on business exits.
He said he would change Business Asset Disposal Relief. BADR currently lets qualifying sellers pay 18% capital gains tax instead of 24% when they sell, but under his plan the lifetime gains eligible for that treatment would be capped at £500,000 - an amount the government put at $664,950 - versus the prior £1 million ceiling.
The proposed Founders Relief and who could qualify
Separately, Healey outlined a Founders Relief under which gains would be taxed at 10% on up to £10 million "for the founders of our most successful firms." To be eligible, a founder would need to have owned 25% of the shares when the company first started trading, kept those shares for a minimum of five years ahead of the sale, and been UK tax resident for five straight tax years before the sale.
There are company-level tests too. The company must be pursuing the same trade it was established to undertake at the time the founder's shares were issued, and it must have booked no less than £10 million of revenue in the accounting period immediately before the sale. The government said it will open a consultation to pin down the precise eligibility.
Savvy investors look for small advantages that compound over time and reduce risk. We're hosting our first ever investor livestream on 11/17 to show you how to use ChatGPT and Claude to invest like a pro, hosted by Briefs Finance CEO Jaspreet Singh. Save your seat.
The fiscal math and other tweaks
By the Treasury's own figures, the BADR cap would raise £305 million by 2031/32, while the 10% Founders Relief would cost £300 million over the same horizon - close to a wash for the public finances. Healey added that the trading allowance - the tax-free amount from a new side venture - would be tripled from £1,000 to £3,000, and that a Young Entrepreneurs Allowance would be introduced to cover one year of living expenses for young founders.
"The Chancellor has delivered something of a mixed message for entrepreneurs in today's Budget," said Michael Carter, a partner who leads incentives at law firm Osborne Clarke. He added that "offering a 10% tax rate on up to £10 million of lifetime gains, it appears to restore a substantial incentive for entrepreneurs to build and sell businesses in the UK."
Why it matters for your portfolio
If you back or build UK startups, the direction is clear: broader relief for qualifying founders, less headroom for sellers relying on BADR. Founders who can clear the ownership, residency, and revenue bars could see materially lower exit taxes, while established owners planning disposals under old limits may need to rework expectations.
Learning how new tools can sharpen judgement helps investors make more confident choices. On 11/17, our CEO Jaspreet Singh goes live for our first ever investor livestream on how to use ChatGPT and Claude to invest like a pro. Register to join him.
