Budget Resolution No. 7: Capital gains tax (business asset disposal relief)

Parliament voted on 6 November 2024 to approve Budget Resolution No. 7, which reduces the value of Business Asset Disposal Relief (BADR), a tax relief that lowers the rate of capital gains tax paid by business owners when they sell their companies. The resolution passed by 400 votes to 120, with strong government support across Labour, Labour and Co-operative, SNP, Plaid Cymru, and Green Party members voting in favour, and Conservatives, Reform UK, the Democratic Unionist Party, and Traditional Unionist Voice voting against.

Business Asset Disposal Relief currently allows qualifying business owners to pay a reduced rate of capital gains tax on proceeds from selling their business, up to a lifetime limit. This resolution reduces that relief, meaning sellers will face a higher tax rate on those gains. The change is part of the government's broader autumn 2024 Budget package, designed to raise additional public revenue. It affects entrepreneurs, business founders, and long-term shareholders who sell qualifying business assets, particularly those planning exits from owner-managed businesses.

The vote divided almost entirely along party lines. Labour, the Labour and Co-operative Party, SNP, Plaid Cymru, and the Greens all voted in favour. Conservatives, Reform UK, the DUP, and Traditional Unionist Voice opposed it, arguing the change would deter entrepreneurship and reduce business investment. A small group of independents split, with seven voting aye and four voting no. The vote reflects the broader pattern of the government's autumn Budget passing through Parliament, a process that also included related contested divisions on business rates and national insurance contributions in the months that followed.