On a qualifying pharmacy disposal, Business Asset Disposal Relief charges CGT at 18% for 2026/27 on gains up to the £1m lifetime limit per person. Beyond that, standard CGT applies at 18% within the basic-rate band and 24% above it, against a £3,000 annual exempt amount. The BADR rate has stepped up from 10% before 2025/26, to 14% in 2025/26, to 18% from 6 April 2026, which means the timing of your exit is a real money decision. Deal structure, earn-outs, and deferred consideration change when the tax falls due. We plan the exit before heads of terms are agreed, not after.
BADR is not automatic on a pharmacy sale. The qualifying conditions, including the two-year holding period, must be met. Getting the eligibility check wrong before exchange leaves money on the table or creates a nasty post-completion surprise. We verify the conditions before you agree heads of terms, when there is still time to act.
Above the £1m BADR limit, or where BADR does not apply, CGT is 18% on gains within the remaining basic-rate band and 24% on gains above it. Many sellers and their advisers quote a flat rate, which is wrong and either overstates or understates the liability. The £3,000 annual exempt amount applies for 2026/27 before any CGT is due.
Where some of the sale price is deferred or contingent, the CGT timing rules mean some of the gain may fall into a later tax year, potentially at a different rate. This is real planning territory, particularly given the step-up in BADR rates in recent years. Structuring an earn-out without modelling the tax timing is a costly oversight.
On most pharmacy sales, goodwill is the largest component of the gain because it reflects the NHS contract and prescription volume. The gain on goodwill must be computed correctly, and where the pharmacy is held in a company, the share sale route changes how the gain is taxed compared with an asset sale.
We review the qualifying conditions before exchange and advise on any steps that might be needed. Where the BADR rate history matters to your timing decision, we model the outcomes. The rate was 10% before 2025/26, 14% in 2025/26, and is 18% from 6 April 2026, per HMRC guidance. We do not assume eligibility; we verify it.
We model the CGT outcome under different deal structures, including upfront consideration, earn-outs, and deferred payments. Where the timing of the gain falling due changes the tax position, we show the options before you commit to heads of terms. We coordinate with your solicitor and broker on the structure.
We compute the gain, apply BADR and the annual exempt amount correctly, prepare the Self Assessment return, and handle any HMRC correspondence. Where an advance CGT payment is required, we calculate and manage it. For significant disposals involving complex earn-outs, we also prepare the provisional figures your broker may need during due diligence.
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