Shareholder exit planning: why now is the time to act before April 2026

With significant UK tax reforms on the horizon, shareholders contemplating an exit should be thinking strategically—and fast. April 2026 marks a turning point for capital gains tax, business reliefs, and trust planning. Acting early could mean the difference between a tax-efficient exit and a missed opportunity.

Here’s a concise overview of the key planning options available.

Why act now?

The UK government has announced several changes effective from April 2026:

• Capital Gains Tax (CGT): Business Asset Disposal Relief (BADR) will rise from 14% to 18%.
• Business Property Relief (BPR): Relief on AIM-listed shares will be reduced from 100% to 50%.
• Trust planning: Windows for favourable repatriation and inheritance tax (IHT) mitigation are narrowing.

These changes will impact the net proceeds of any exit and so, planning ahead could allow shareholders to lock in current reliefs and optimise outcomes.

Planning options before April 2026

1. Sell before April 2026

• Lock in the current BADR rate.
• Ideal for shareholders with gains under £1m or those nearing retirement.
• Prepare valuations and resolve due diligence early.

2. Transfer shares to a trust

• Preserve BPR and defer CGT using holdover relief.
• Suitable for succession planning and asset protection.
• Ensure trading status and execute trust deeds before reliefs change.

3. Restructure business assets

• Separate trading and investment assets to simplify sale.
• Useful for complex group structures or mixed portfolios.

4. Explore alternative exit routes

• Consider Management Buy-Outs (MBOs), Employee Ownership Trusts (EOTs), or strategic sales.
• Align shareholder expectations and update governance documents.

5. Philanthropic planning

• Donate shares to UK charities for CGT and gift aid relief.
• Ideal for shareholders with charitable goals and surplus gains.

Next steps

• Review shareholder agreements for exit clauses and valuation mechanisms.
• Seek HMRC clearance where needed (e.g. CPOS, trust transfers).
• Engage advisors early to model scenarios and prepare documentation.

Final thought

The window for tax-efficient exits is closing. Whether you're planning a full sale, a phased exit, or a legacy transfer, now is the time to act - April 2026 will be here sooner than you think!

If you'd like help tailoring your exit strategy or understanding how these changes affect your position, please contact one of our team members.