April 2026 rewrote two of the tax rules that matter most to anyone who owns a fire safety business. Business Asset Disposal Relief, which lowers the tax on selling a business you own and work in, climbed to 18 per cent, and a new cap arrived on the inheritance tax relief that applies to business assets. Neither change should send you rushing, but both reward doing the arithmetic sooner rather than later.
This post sets out what changed, in plain terms, and what it means for the timing of a sale. It expands on the tax force in our 2026 fire safety market briefing. None of it is tax advice; the right answer depends entirely on your circumstances, and your accountant should have the final word.
BADR: The Staircase Is Complete
Business Asset Disposal Relief is now 18 per cent. The rate has climbed in steps: 10 per cent before April 2025, 14 per cent for the 2025-26 tax year, and 18 per cent from Apr 2026. The relief still applies to the first one million pounds of qualifying lifetime gains, with the excess taxed at the main 24 per cent rate. The two-year qualifying conditions still apply. What sets the rate is the day the sale contract becomes unconditional, meaning binding with nothing left to satisfy. That is often completion day but not always, and it is never the handshake. Rules also stop an owner signing early purely to keep an older rate.
Because the rise has already happened, the countdown-to-the-deadline articles you may have read last spring have expired. What is left is a calmer calculation. At 18 per cent, BADR is still worth up to 60,000 pounds on a full one million pound gain compared with the main rate. The gap between 18 and 24 per cent is now the narrowest it has ever been. Whether it narrows further is a matter for future Budgets, and the direction of travel since 2024 has gone one way.
The date the contract becomes binding sets the rate, not the handshake. Timing a sale is a tax decision as much as a commercial one.
The Inheritance Tax Cap Fewer Owners Have Clocked
The second change is quieter and, for owners of larger fire safety businesses, arguably more important. From April 2026, 100 per cent Business Property Relief from inheritance tax applies only to the first 2.5 million pounds of combined business and agricultural assets. Above that, relief halves to 50 per cent, an effective 20 per cent inheritance tax rate on the excess.
The detail is worth knowing. The cap was originally announced at one million pounds and raised to 2.5 million pounds in Dec 2025. It is transferable between spouses and civil partners, so a couple can shelter up to 5 million pounds. The government expects up to 1,100 estates across the UK to pay more inheritance tax in 2026-27 as a result.
Why This Changes the Exit Question
For years, a perfectly rational plan for many owners was simple: hold the business for life, pass it on, and let Business Property Relief remove the inheritance tax. For estates above the new cap, that plan now carries a price. An owner whose certificated fire safety business is worth well above 2.5 million pounds faces a different estate position than they did before April, and that shifts the comparison between holding, gifting and selling.
This is not a reason to sell; it is a reason to look. If your business is a significant part of your estate, the changes are worth an hour with your accountant this year rather than eventually. And whichever way that conversation points, a current, honest valuation is the number every option is measured against.
Tax and legal advice on a sale comes from your own advisers, and it helps to know who you will need, and when to bring them in.
