Usually Capital Gains Tax on the profit you make from the sale. If you qualify for Business Asset Disposal Relief, the rate on qualifying gains is 18% for sales from 6 April 2026, up to a lifetime limit of £1 million.
When you sell your salon, the gain is broadly the price you receive, less what you paid for the business and certain costs of selling. For most owners who started the salon themselves, much of the price is gain.
Business Asset Disposal Relief
This relief, previously called Entrepreneurs’ Relief, lowers the Capital Gains Tax rate on qualifying business sales. HMRC’s published rates are:
- 18% for disposals from 6 April 2026
- 14% for disposals from 6 April 2025 to 5 April 2026
- 10% for disposals on or before 5 April 2025
You can claim up to £1 million of gains over your lifetime.
Who qualifies
- Sole traders and partners who have owned the business for at least two years up to the date of sale. If you close the business instead, you can still qualify if you dispose of the assets within three years.
- Shareholders in a trading company who, for at least two years, have held at least 5% of the shares and voting rights, been entitled to at least 5% of the profits and assets (or of the sale proceeds), and been an employee or officer of the company.
The rate that applies depends on when contracts are exchanged, not when the sale completes. Without the relief, gains above the basic rate band are taxed at 24%.
Before you agree a deal
How the sale is structured, whether you sell the business or the company shares, how the price is split and when payments are made, all affect your tax. Speak to your accountant before you accept an offer, not after.