A significant change to Capital Gains Tax (CGT) is expected in April 2026 and for dental practice owners, the financial impact could be considerable.
Whether you’re planning to sell your practice, own the freehold premises, or have a buy-to-let portfolio, the timing of any future sale will be crucial.
Currently, when a dental practice is sold, the profit is taxed under CGT rules. With Business Asset Disposal Relief (BADR), many owners benefit from a reduced 10% tax rate on qualifying gains, up to £1 million. However, mounting speculation suggests this relief could be scaled back or scrapped entirely. The government may also consider increasing CGT rates to align more closely with income tax bands – raising the rate to as much as 40% or 45% for some sellers.
If you’re planning to sell in the next few years, delaying the transaction until after April 2026 could be costly. For every £100,000 of gain, the tax paid under BADR could rise by £8,000 if relief is removed or rates increased.
For example:
A qualifying business sold today with a £500,000 taxable gain might result in a £70,000 tax bill (14%).
The same transaction after April 2026 could incur £90,000 in CGT – a £20,000 increase, with the potential for further liability if the annual CGT allowance is reduced or removed.
Now is the time to take stock, review your asset portfolio and consider your long-term exit strategy.
You may want to:
- Where practical, bring forward any planned sale ahead of April 2026.
- Split gains over tax years to make use of multiple CGT allowances.
- Consider incorporation or other tax-efficient holding structures.
- Speak with your accountant or financial planner about the best strategy for your situation.
If you’re planning to retire or sell your dental business, you may want to assess whether an earlier sale could protect more of your gain under the lower rate.
At Frank Taylor & Associates, we work exclusively with dental practice owners to plan and execute successful exits. If you want clarity on how these CGT changes could affect your practice sale, get in touch – we’re here to guide you every step of the way.
