The New Rate Is Live: What Changed for HVAC Owners This April

The RateBusiness Asset Disposal Relief is now 18%

From today, Business Asset Disposal Relief applies at 18% to qualifying gains up to a £1m lifetime limit. That is the second of the two rises announced at the Autumn Budget on 30 October 2024, the first having taken the rate from 10% to 14% on 6 April 2025. The completion date of a disposal is what determines the rate, which is the detail that matters most to anyone with a process underway.

Against the 24% main higher rate of Capital Gains Tax, the relief is still worth having. On a full £1m of qualifying gain the difference between 18% and 24% is £60,000, which is a material sum and considerably less than it was two years ago. That is the honest way to describe the position: still a genuine relief, on a clear trajectory towards the main rate.

What none of that justifies is a reactive decision. A rate that has already changed is not a deadline, and the owners who lost most over the last eighteen months were the ones who compressed a sale to beat one. Whether today's position changes anything for you is a question for your own accountant, working from your figures.

The EstateThe inheritance tax position on holding the business has changed too

The cap on agricultural and business property relief also takes effect this month. The first £2.5m of combined qualifying business and agricultural assets keeps 100% relief; above that the relief falls to 50%, which produces an effective inheritance tax rate of 20% on the excess. The allowance is transferable between spouses and civil partners, so a couple can hold up to £5m between them at the full rate.

That figure moved once before it arrived. The cap was announced at £1m and raised to £2.5m on 23 December 2025, which is worth knowing because a good deal of commentary written in between still refers to the lower number. HMRC's own estimate is that around 1,100 estates a year will pay more as a result.

For an owner whose heating or air conditioning business is a large share of their estate, this changes a calculation that many people had treated as settled: holding the business until death is no longer relief-free above the cap. It does not make selling right, and I would be cautious of anyone who says it does. It makes the comparison between selling, passing on and holding a live question again, and one for a tax adviser rather than an article.

The ResponseThe useful response is the unexciting one

Work out what the business is worth, check the position with somebody who has your accounts in front of them, and let both feed a plan rather than stand in for one. Everything that lifts the price of a heating business, a contracted maintenance book, certified engineers who stay, records a stranger can follow and an owner the business can function without, is unaffected by today and takes twelve to twenty-four months to build.

If you were already planning an exit in the next two or three years, today changes a figure in your model and nothing else. If you were not, it is not a reason to start. The one group for whom it genuinely matters is owners with a large estate concentrated in the business, and for them the right next step is a conversation with their own adviser this month rather than a decision.

It is also worth noticing what has not changed, because the commentary over the next fortnight will be entirely about what has. Buyers still pay for contracted income, still discount concentration, still price owner dependence, and are still short of certified engineers in a trade where recruitment is the constraint on growth. Those four things have decided the price of every heating business I have seen change hands, through three different rates of relief, and they will decide yours.