South coast law firm braces for business deal rush

Ellis Jones Solicitors, a prominent south coast law firm, has reported a significant increase in business deal instructions as clients rush to complete transactions ahead of impending changes to the UK’s Capital Gains Tax (CGT). The recent spike in caseloads for the firm’s Business Law team follows the Chancellor’s autumn Budget, which announced substantial CGT rate hikes and adjustments to Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs’ Relief.

Neil Cook, Partner and Head of Business Services at Ellis Jones, remarked on the surge in activity: “The lead-up to the Budget was extremely busy for us as people sought to close deals before the much-anticipated rate hikes took effect. However, it’s not over yet. We now expect a further deluge of work as clients race to complete transactions before the cliff edge of next April, driven by changes to BADR.”

The autumn Budget introduced new CGT rates, increasing the tax burden on gains from business asset sales. This has set off a wave of action among business owners, directors, and investors who want to lock in lower rates before the increases take effect. Specifically, the Budget confirmed that from 6 April 2025, the CGT rate under BADR on qualifying business gains will rise from the current 10% to 14%, with a further increase to 18% slated for April 2026. This translates to significantly higher tax liabilities for those unable to finalise deals within the next two tax years.

Cook illustrated the implications of these changes, saying, “Under BADR, if you have a £1 million gain on a qualifying business asset, you currently pay 10%, which amounts to £100,000. However, if the deal closes after 6 April 2025, you’ll be paying 14%, or £140,000. A year later, that figure jumps to £180,000—an extra £80,000 compared to today’s rate.”

With additional increases announced for the CGT headline rate to 24% for non-basic rate taxpayers, the pressure is on for clients looking to avoid substantial tax hikes. In one instance, a client incurred hundreds of thousands in additional taxes on a disposal due to the increased rates.

Partner Wayne Spolander, also of Ellis Jones’ Business Services department, underscored the importance of early planning: “Many clients were proactive, leveraging our services to finalise deals before the new rates. This foresight enabled them to sell their businesses or complete other transactions at the previous CGT rate of 20%, thus saving significantly on their tax bills.”

The tax landscape for business owners continues to shift, with Ellis Jones poised to support clients as they navigate these changes. Spolander added, “The Chancellor may not have removed BADR, but the upcoming rate hikes mean a greater cost for clients. We’re prepared to guide clients on the legal front and always recommend they consult tax experts for comprehensive advice on CGT planning.”

Ellis Jones Solicitors, with offices in Dorset and London, anticipates further increases in client inquiries as the April 2025 deadline approaches. The firm’s Business Services team is braced for a new wave of clients seeking to mitigate the financial impact of these tax reforms.