Business Asset Disposal Relief When Selling an Ecommerce Brand

If you sell your ecommerce brand on or after 6 April 2026, Business Asset Disposal Relief taxes qualifying gains at 18%, up to a lifetime limit of £1 million. Without the relief, a higher-rate taxpayer pays 24% on the same gain. Whether you qualify depends on how the deal is structured, how long you have held the shares or run the business, and whether your company still counts as a trading company on the day of sale. Most of those points need checking before you agree heads of terms, not after.

This article is part of our ecommerce valuation and exit guide. It covers the relief for Amazon FBA, Shopify and multi-channel brands sold to aggregators, trade buyers or management.

The Rates and the Lifetime Limit

The relief rate has risen twice in two years. Gains on disposals up to 5 April 2025 qualified at 10%, disposals in the 2025 to 2026 tax year at 14%, and disposals from 6 April 2026 at 18%. The lifetime limit stayed at £1 million throughout, as GOV.UK's Business Asset Disposal Relief page confirms.

Gains above the £1 million limit are taxed at the normal rates of 18% within your basic rate band and 24% above it. For 2026 to 2027 the annual exempt amount is £3,000. The Autumn Budget on 26 November 2025 did not change the relief rate or the limit.

Selling Shares in Your Company

Most brands that sell for a meaningful sum are limited companies, and a sale of the shares is the simplest route to the relief. For at least two years up to the date of sale you need to meet all of these conditions:

• You are an officer or employee of the company or a company in the same group.
• You hold at least 5% of the ordinary shares and at least 5% of the voting rights.
• You are entitled to at least 5% of the distributable profits and 5% of the assets on a winding up, or to at least 5% of the proceeds if the whole company were sold.
• The company is a trading company, or the holding company of a trading group.

Every shareholder qualifies separately. A spouse who holds shares but does not work in the business as an officer or employee will not usually meet the conditions, even if the shares were given to them years ago.

The Trading Company Test and Cash Built Up in the Business

A profitable Amazon or Shopify company often builds up more cash than it needs, or puts surplus funds into investments. This matters, because the company must not carry on non-trading activities to a substantial extent. HMRC looks at non-trading income, the asset base, how directors and staff spend their time and the company's history. Its capital gains manual on the trading company test still says that where none of these suggests the non-trading element exceeds 20%, a detailed review is unlikely to be needed. It also warns that the 20% figure is not a strict limit.

If the test fails, the whole share sale loses the relief, not just the share linked to the cash. Cash held for a clear trading purpose, such as stock for peak season or a planned product launch, is easier to defend than a growing deposit with no plan. Review the balance sheet at least two years before you expect to sell, and record board decisions about what surplus cash is for. HMRC will also consider a non-statutory clearance on trading status where the position is uncertain.

Asset Sales and Selling Part of a Brand

Aggregators sometimes prefer to buy the trade and assets, such as the listings, trademarks, stock and supplier contracts, rather than the company. In that case the company sells the assets and pays corporation tax on any gain. You then need a second step, such as a dividend or a members' voluntary liquidation, to take the money out personally, and the relief is only available on that second step if the conditions are met at the time.

Sole traders can claim the relief when they sell the whole business or a distinct part of it, provided they have run it for at least two years. Selling one brand name, a block of listings or old stock while carrying on trading is a different matter. HMRC's guidance says the sale of an asset will only be the sale of part of a business in highly exceptional circumstances, and that simply scaling down activities is not enough. If you trade as a sole trader and are planning an exit, our comparison of sole trader and limited company structures for Amazon sellers covers the questions to settle early.

Earn-Outs and Payment in Buyer Shares

Aggregator and trade deals often pay part of the price later, depending on future sales or profit. HMRC's guidance treats the right to that future payment as part of the sale consideration. The relief applies to the value of the earn-out right at completion, and later payments under it get no further relief. A large earn-out can therefore mean much of the eventual price is taxed without the relief.

If the buyer pays in its own shares or loan notes, the default rule treats your new holding as a continuation of the old one, so no gain arises at completion. You can elect to tax the gain at the exchange instead and claim the relief then. The deadline for that election is the first anniversary of 31 January following the tax year of the exchange. Earn-outs settled in buyer shares or loan notes have their own rules, so the paperwork needs to be right at signing.

Timing, Claims and Records

• The disposal date for a share sale is the date the contract becomes unconditional, not the date the money arrives. A deal exchanged on or after 6 April 2026 is taxed at 18%.
• The relief is not automatic. You claim it on your Self Assessment return or by a separate claim, and for a 2026 to 2027 disposal the deadline is 31 January 2029.
• Keep the share register, employment or director records and the board minutes that support the trading position for the two years before sale.
• From 26 November 2025, sales to an Employee Ownership Trust qualify for only 50% relief from capital gains tax, and Business Asset Disposal Relief cannot be claimed on the taxable half.

If you are thinking of selling within the next two years, we can review your structure, shareholdings and balance sheet against these conditions. See our Amazon FBA accountants service for how we work with growing brands.

Questions Owners Ask About Selling an Ecommerce Business

What is the Business Asset Disposal Relief rate in 2026?

18% for disposals on or after 6 April 2026, on up to £1 million of qualifying gains over your lifetime.

Can I claim the relief if I sell assets rather than shares?

A company selling its assets pays corporation tax on the gain, and you only get the relief on a later qualifying step such as a liquidation. A sole trader can claim it on the sale of the whole business or a distinct part, but not on the sale of individual assets while carrying on trading.

Does cash in my company stop me getting the relief?

It can if non-trading assets or income are substantial. Cash with a documented trading purpose is easier to defend, so review the position well before a sale.

Is the relief automatic?

No. You must claim it, and the deadline is the first anniversary of 31 January after the tax year in which you sold.