The interaction between BADR (previously known as entrepreneurs' relief before April 2020) and exchanges of shares and securities is far from straightforward. There are two main reasons for this. The first is that the rules governing exchanges of securities work differently depending on whether or not the security is a qualifying corporate bond. The second is the result of the 2010 changes in the method of calculation of the relief. As a consequence of this there are a number of different possible methods of applying and calculating BADR associated with share exchanges, depending both on the date of the original exchange and on the date of the final disposal.
In addition, with the change in CGT rates from 30 October 2024 and the increase in BADR from 6 April 2025, two anti-forestalling rules have been introduced where an election is made to disapply the capital gains tax share reorganisation provisions for the purposes of claiming BADR, see below.
In a straightforward share for share exchange (including an exchange for non-QCB securities, which will almost always
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Web page updated on 21 Mar 2025 09:41