Business Asset Disposal Relief and Residential Property: The Qualification Rules (and Why Buy-to-Let Fails)
Business Asset Disposal Relief (BADR) exists to reward owners of trading businesses with a lower CGT rate on qualifying disposals. Most residential property owners do not qualify. The rate is now 18% from 6 April 2026 (Finance Act 2025 s.8), up from 14% the year before and 10% historically. The advantage over the standard 24% residential CGT rate has narrowed to 6 percentage points. This page sets out the statutory trading test under TCGA 1992 ss.169H, 169I and 169S, why buy-to-let investment property fails that test, what the FHL abolition from April 2025 changed, where the serviced-accommodation edge case sits post-abolition, how a genuine property trading company can qualify, and how the £1 million lifetime limit works across multiple disposals.