The New Rate and What It Means for Security Owners

What changed this week, and what it costs

Business Asset Disposal Relief, the relief that lowers the tax owners pay when they sell a business they run, has charged 18% on qualifying gains since Apr 2026, against a lifetime limit of £1m of qualifying gains. That is a higher rate than before, so owners now keep a little less of a sale. The rate was 14% in the 2025/26 tax year, having been 10% until April 2025, and the two-step increase was announced at the Autumn Budget in October 2024. For tax, what counts is normally the date the sale contract becomes binding with no conditions left, often but not always the day the deal completes, which means the position is now settled rather than approaching: for any sale from here, 18% is the number.

The arithmetic is worth stating plainly. On a full £1m of qualifying gains the relief now saves up to £60,000 against the 24% main rate, where a year ago it saved £100,000, and between October 2024 and April 2025 it saved £140,000. That is a real reduction in the benefit and it is also, for most owners of an owner-managed security business, a smaller figure than the difference between a well-run sale process and a poor one.

The direction of travel is the part worth noticing rather than the rate itself. In two tax years the relief has gone from a large saving to a modest one: the BADR rate of 18% now sits much nearer the 24% main rate than the 10% it started from. That is where the rules stand today, not a forecast, and it is no reason to rush.

One practical note for anybody mid-process. Heads of terms (the early outline of the deal) do not fix the rate. What does is normally the day the contract becomes unconditional, which is usually exchange, when both sides sign and are committed, and often the same day as completion. Since Budget day in October 2024 there have been rules to stop owners signing early just to lock in a lower rate, and your own accountant should confirm the position against your structure rather than against a general description of it.

The inheritance tax change arriving alongside it

The second change affects owners who had not thought of selling up as a tax question at all. From this month the first £2.5m of combined business and agricultural assets attracts full inheritance tax relief, with 50% relief on the excess, and the allowance is transferable between spouses and civil partners.

For an owner holding a security business worth more than that allowance, keeping it until death now carries a cost that did not previously exist. The company that was going to pass to the family intact, or be sold by executors at whatever the market offered on the day, has become a decision with a number attached to it. That is a genuinely new consideration for a group of owners who were content to leave the question open indefinitely.

What to do about it is a matter for your own tax adviser against your own figures, and I would be cautious of anybody in my trade who told you otherwise. What I would say is that the conversation is considerably more useful once you know what the business is actually worth, because the allowance only means something set against that figure.

Why preparation still outweighs timing

Across owner-managed security businesses, the difference between a prepared sale and an unprepared one routinely exceeds the difference between any two of these tax positions. Preparation changes how many years of profit a buyer will pay, the number of buyers willing to bid, how much of the price lands on completion day rather than three years later, and the warranties the seller ends up giving, which are the statements about the business confirmed in the contract. Tax affects only what survives once all of that has been settled.

In this sector the preparation list is specific and has not changed with the rate. Show how much of your income is recurring, with a schedule of the contracts behind it. Check that your NSI or SSAIB approval covers the work you actually do and will carry over to a new owner. Keep SIA licence and vetting files complete enough for a buyer to check a sample. Count exactly how many monitored alarms still have to move off old phone lines, rather than estimating. And step back far enough that the business can be described without describing you.

An owner who works through that list over twelve months and completes at 18% will do better than one who rushes to market this quarter, and the gap is not close. The relief was never the reason to sell and it is a poor reason to hurry. What has genuinely changed is that the tax question now has a settled answer, which makes it easier to put aside and get on with the part that actually moves the number.

Both changes are now fixed. What you can still change is the evidence the business can produce, and no Budget decides that.

Before a sale you will need an accountant or tax adviser and a corporate solicitor, and it helps to know when to bring each one in.