Update – October 2025: Capital Gains Tax on MVLs Will Rise Again in April 2026
From 6 April 2026, the Members Voluntary Liquidations Capital Gains Tax rate, where Business Asset Disposal Relief (BADR) applies, will increase from 14% to 18%. This change was confirmed in the Autumn 2024 Budget and follows the earlier rise from 10% to 14% in April 2025.
What does this mean to directors planning to close a solvent company? Timing is now critical. The MVL process typically takes several weeks, and initial distributions must be made before 6 April 2026 to qualify for the current 14% rate. Antony Batty & Company continues to support directors through this process, ensuring compliance and efficiency.
Why do MVLs remain a tax-efficient way to close a solvent company?
Although the 10% rate is no longer available, MVLs remain a tax-efficient option for directors seeking to close a solvent company and extract retained profits. The current 14% rate under BADR still offers a lower tax burden than standard Capital Gains Tax rates, which can reach 20% for higher-rate taxpayers.
To qualify for BADR, shareholders must meet specific conditions:
- They must have held shares for at least two years.
- They must be an officer or employee of the company.
- The company must be a trading entity.
BADR is claimed via the individual’s self-assessment tax return, and the lifetime limit of £1 million per person remains unchanged.
Why is timing important for MVLs?
The Members Voluntary Liquidation process involves formal steps, including the appointment of a Licensed Insolvency Practitioner, statutory declarations, and asset distribution. It can take several weeks before the first distribution is made. To benefit from the current MVL Capital Gains Tax rate before April 2026, directors must act well in advance.
Antony Batty & Company advises directors who are looking to close their solvent company to begin planning now to ensure distributions are made in time before the rate increases to 18%. Our team has extensive experience in handling MVLs and can guide clients through every stage of the process. Take a look at some of our testimonials.
What effect could the November 2025 Budget have?
The next UK Budget is scheduled for 26 November 2025. At the time of writing, no further changes to Business Asset Disposal Relief (BADR) or Capital Gains Tax have been announced or even hinted at.
However, with the confirmed increase to 18% from April 2026 already in place, directors considering an MVL may wish to act now to avoid future uncertainty. Antony Batty & Company continues to monitor developments and will update clients if any new measures are introduced.
Contact us if you are considering an MVL for your company.
Frequently Asked Questions about MVLs and BADR
What is a Members’ Voluntary Liquidation (MVL)?
An MVL is a formal process for closing a solvent company, allowing shareholders to extract retained profits in a tax-efficient way.
How does Business Asset Disposal Relief (BADR) apply to MVLs?
BADR reduces the Capital Gains Tax rate on qualifying distributions made during an MVL, subject to eligibility and a lifetime limit of £1 million per individual.
What is the MVL Capital Gains Tax rate from April 2026?
From 6 April 2026, the rate increases to 18% for qualifying MVL distributions under BADR.
What are the current and upcoming BADR tax rates?
- 6 April 2025 to 5 April 2026: 14%
- From 6 April 2026 onwards: 18%
Who qualifies for BADR in an MVL?
Shareholders must have held shares for at least two years, be an officer or employee of the company, and the company must be a trading entity.
Why is timing important for MVLs?
MVLs take several weeks to complete. To benefit from the current MVL Capital Gains Tax rate before April 2026, initial distributions must be made before that date.
Can Antony Batty & Company help me meet the deadline?
Yes. Our experienced team can guide you through the MVL process efficiently to help ensure distributions are made in time.
Will the BADR rules change again in the next Budget?
No changes have been announced. The next confirmed rate increase is to 18% from 6 April 2026. Planning ahead is recommended.
Why does the URL mention 10% when the rate is now higher?
This article was originally published in February 2025, when the Capital Gains Tax rate for MVLs qualifying for Business Asset Disposal Relief (BADR) was 10%. It has since been updated to reflect the current and upcoming rates, but the original URL has been retained to preserve its search engine ranking and historical context.
Original article from February 2025 – The Capital Gains Tax rate on MVLs that qualify for Business Asset Disposal Relief (BADR) increases to 14% on 6th April 2025
If you are a Company Director considering closing your solvent company/companies using Members Voluntary Liquidations (MVL), you must act soon, if you qualify for Business Asset Disposal Relief (BADR), to benefit from the significant tax advantage of the current 10% Capital Gains Tax (CGT) rate.
Following the Chancellor’s budget announcement last October, the CGT tax rate for BADR is set to increase to 14% on 6th April 2025. This means that if you delay your MVL until after this date, you will lose out on a substantial tax saving.
Talk to us about Members Voluntary Liquidations
The MVL process can take several weeks to make an initial distribution, so starting the process now (mid-February) is important. Delaying even a few days could result in missing out on the current lower tax rate.
Contact Antony Batty & Company to ensure you can take full advantage of the current 10% tax rate before it increases. With over 25 years of experience, our team of Licensed Insolvency Practitioners has a strong track record of efficiently and effectively handling Members Voluntary Liquidations and maximising benefits through Business Asset Disposal Relief (BADR).
Our expertise and dedication to achieving the best outcomes for our clients mean you can trust us to guide you through the MVL process with professionalism and integrity.
MVL Case Studies
These case studies highlight Antony Batty & Company’s expertise and experience in efficiently handling MVLs and maximizing benefits through Business Asset Disposal Relief.
- Circus Minds Limited: Terry Runham, the former director, praised our smooth and efficient handling of his company’s MVL. The process involved the speedy extraction of retained profits, allowing shareholders to claim Entrepreneurs’ Relief (now known as BADR) on the distribution.
- Marine 123: Glen Andrew, the retiring director, was delighted with the well-executed and organised MVL, with the winding -up being completed in less than 11 months. The liquidation delivered a cash distribution to the sole shareholder of both Companies.
- APT.64 Limited: Gary Bonilla-Latoni, the sole shareholder, appreciated the support and great work during the MVL of his management consultancy. The liquidation was smooth, with the final cash distribution made across four separate payments.
Here at Antony Batty & Company, we have successfully completed hundreds of MVLs since we started in 1997.
The initial consultation is FREE and without obligation. Contact us at any of our offices:
