Business Asset Disposal Relief
The lifetime limit for Business Asset Disposal Relief will reduce from £1 million to £500,000 for disposals made on or after 6 April 2027. While the 18% CGT rate for qualifying disposals remains unchanged, the reduction will increase the tax cost of larger business exits.
Cash ISA limit retained
The government has confirmed that the annual Cash ISA subscription limit will remain at £20,000. The previously proposed reduction to a £12,000 limit from 6 April 2027 will therefore not proceed, preserving the current level of tax-efficient savings available to individuals.
First Time Buyer ISA
From April 2029, a new ISA replaces the Lifetime ISA for new savers. Annual contributions of up to £4,000 attract a 25% government bonus paid on qualifying withdrawal, for first homes up to £450,000; the bonus is capped at £20,000 and there is no upper age limit. Existing LISA holders may continue.
New ISA incentives
The government will work with industry to develop a potential incentive for first time investors using Stocks and Shares ISAs. While no detailed proposals have yet been announced, the objective is to encourage greater participation in long term investment markets.
Founders’ Relief
A new Founders’ Relief will be introduced from 6 April 2027, providing a 10% CGT rate on up to £10 million of lifetime gains realised by qualifying founders of high-growth and innovative businesses. The relief is designed to reward entrepreneurial success and encourage long term investment in UK businesses.
Employee share schemes
From 6 April 2027, the Company Share Option Plan will be expanded and rebranded as EMI2. The individual option limit will double to £120,000, exercise periods will be extended to 15 years and reporting requirements simplified removing the interaction with the EMI option limit. This will make tax-advantaged share incentives more accessible and attractive for growing businesses.
Securities Transfer Tax
From late 2027, a new Securities Transfer Tax will replace both Stamp Duty and Stamp Duty Reserve Tax, representing the most significant reform of the UK’s share transfer tax regime in many years. Whilst further detail is awaited, the new framework is intended to modernise and simplify the taxation of securities transactions.
Company distributions reforms
From April 2028, the government will introduce a new framework for the taxation of company distributions. The reforms aim to provide more consistent tax treatment across different legal structures and transaction types, whilst preserving capital treatment for genuine ownership changes, including family succession arrangements. Businesses considering reorganisations or demergers should monitor developments closely as draft legislation is expected during 2027.
