All that panic for… What the Autumn Budget really means for business exits

After weeks of leaks, rumours and half-baked predictions, Rachel Reeves’ second Autumn Budget finally landed yesterday. The big takeaway for business owners? For all the noise, the worst-case scenarios didn’t happen. But the direction of travel is now unmistakably clear. 

For anyone thinking about extracting profits, raising capital or preparing for a future exit, the Budget didn’t deliver the sweeping tax overhaul many feared – but it did quietly reinforce one message: a capital gain remains the most tax-efficient way to take value off the table. 

Below is a concise breakdown of what actually changed, what didn’t, and what it means if you own and run a business in the UK. 

Capital Gains Tax: The dog that didn’t bark

One of the biggest pre-Budget worries was another Capital Gains Tax (CGT) rise. That didn’t happen. 

For now, CGT rates stay where they are – a relief for anyone contemplating a sale. But the previously-announced increases are still coming down the track: 

• Business Asset Disposal Relief  (BADR) and Investors’ Relief rates rose from 10% to 14% in April 2025, and are set to increase again to 18% in April 2026 on the first £1 million of gains. 
• CGT on most other assets already increased this year: 
  • 10% to 18% for basic-rate taxpayers 
  • 20% to 24% for higher and additional-rate taxpayers 

The rules haven’t tightened again, but BADR is already less generous than it was. With further increases scheduled for 2026, founders need to be conscious of the direction of travel rather than waiting for perfect conditions. 

Dividend Tax: The slow squeeze begins

From April 2026, dividend tax rates rise by two percentage points: 

• 8.75% to 10.75% (basic) 
• 33.75% to 35.75% (higher)
• Additional rate unchanged 

Individually, the rises aren’t seismic. But cumulatively, they further erode the appeal of drawing profit steadily over time, and tilt the scales toward a one-off CGT-efficient event such as a sale or partial equity release. 

Employee Ownership Trusts (EOTs): Less of a tax break, still an option…

EOTs have been popular largely because founders could transfer their shares with a full CGT exemption. As of yesterday, that exemption has been halved – only 50% of the gain is now tax-free. 

EOTs remain compelling where culture, legacy and employee ownership are the driving objectives. But the financial advantage has clearly reduced, and for many owners the comparison with a third-party sale now looks very different. 

For growing businesses in particular, a conventional sale will usually deliver a higher financial outcome in the near term – unless the company has the cash available to fund an EOT at a genuinely competitive valuation. 

In short, EOTs still work, but fewer businesses will find them the most financially efficient route. They’re now a values-led choice rather than a tax-led one. 

EMI, SEIS, EIS, VCT: A wider runway for scaling

Some genuinely founder-friendly updates here: 

• SEIS/EIS/VCT rules have been widened, allowing more established businesses to raise tax-efficient capital. 
• EMI eligibility expands significantly from April 2026: 
  • Gross asset limit: £30 million to £120 million 
  • Employee limit: 250 to 500 
  • Unexercised options cap: £3 million to £6 million 

For owners preparing for a sale, these changes matter. Well-structured incentives can be the difference between a smooth process and a valuation haircut. More companies will now fall within scope. 

Inheritance Tax: A practical fix for business-owning couples

Last year’s reforms capped 100% BPR/APR relief at £1 million, with only 50% relief above that. This year’s tweak makes the £1 million cap transferable between spouses, giving families more flexibility when planning succession. 

The new rules don’t take effect until 2026-27, but the planning conversations need to start well before then. 

IPO Incentives: A nod to the London market

To encourage more UK listings, shares in newly listed UK companies will be exempt from stamp duty for three years. It’s a niche change for most owner-managed businesses, but signals a broader intent to make London more competitive. 

So what does this all add up to?

 Stripping away the political theatre, three messages stand out: 

1. Exits continue to offer the most favourable tax route. CGT hasn’t increased, but BADR is already less generous than in previous years and will tighten again in 2026. 
2. Dividends are becoming comparatively less attractive. Higher dividend taxes make gradual value extraction more expensive relative to a capital gain. 
3. Early planning pays off. With EOT reform, EMI expansion and future Inheritance Tax changes, founders benefit from coordinated advice across corporate finance, tax and personal financial planning. 

If you’re exploring an exit or capital raise, or want to understand how the Budget interacts with your tax position and long-term planning, our Deal Advisory Team can work alongside our Tax and Financial Planning colleagues to help map out the most effective strategy.