What Are Capital Gains Reliefs for Dentists?
Capital Gains Reliefs are tax reliefs available when dentists sell, restructure, or incorporate their practice. These reliefs reduce the amount of Capital Gains Tax (CGT) due, making transitions like selling a dental practice, moving from sole trader/partnership to limited company, or exiting ownership more tax efficient.
The most relevant reliefs for dental practice owners are:
- Incorporation Relief
- Business Asset Disposal Relief (BADR, formerly Entrepreneurs’ Relief)
Why Do Capital Gains Reliefs Matter for Dental Practice Owners?
Selling or restructuring a practice is one of the largest financial events in a dentist’s career. Without the right reliefs, owners may pay 20% CGT on gains instead of 10% or less.
- Incorporation Relief allows you to move your practice into a limited company without triggering immediate CGT on goodwill.
- BADR reduces CGT to 10% on the first £1m lifetime gains, making a sale or exit significantly more profitable.
Example:
- Dentist sells practice goodwill for £800,000 gain.
- Standard CGT = £160,000 (20%).
- With BADR = £80,000 (10%).
- Tax saving = £80,000.
Key Capital Gains Reliefs for Dentists
| Relief | When It Applies | Benefit |
| Incorporation Relief | When transferring practice from sole trader/partnership into a limited company | Defers CGT on goodwill until shares are sold |
| BADR (Business Asset Disposal Relief, formerly Entrepreneurs’ Relief) | When selling your practice, shares in a dental company, or exiting | Reduces CGT rate to 10% on up to £1m lifetime gains |
| Holdover Relief (less common) | When gifting business assets, e.g. family succession | Defers CGT until recipient disposes of the asset |
How Does DentPulse Help with Capital Gains Reliefs?
| Feature | Function |
| Exit Strategy Module | Models practice sale tax exposure with and without reliefs |
| Scenario Planning | Compares sole trader vs limited company incorporation |
| Profit-to-Pocket™ Overlay | Shows net proceeds after CGT and reliefs |
| OWS™ Integration | Links sale proceeds to long-term wealth score |
| Tax Module | Tracks use of BADR lifetime allowance |
DentPulse makes complex reliefs practical and decision-ready for dental owners.
DentPulse Tip™
“Timing matters in tax.
Incorporate or sell your practice at the wrong time, and you could hand over tens of thousands to HMRC unnecessarily.”
Related Glossary Terms
- Capital Gains Tax on Exit – standard rules for practice sales
- Limited Company for Dentists – incorporation path that triggers reliefs
- Exit Strategy – planning sales, mergers, and succession
- Profit-to-Pocket™ – shows how much you actually keep after reliefs
- Owner Wealth Score (OWS™) – holistic measure that includes exit value
Glossary Summary Table
| Term | Meaning |
| Capital Gains Reliefs | Tax reliefs reducing CGT on incorporation, sale, or exit |
| Main Reliefs | Incorporation Relief, BADR (Entrepreneurs’ Relief) |
| Purpose | Reduce or defer tax to maximise take-home wealth |
| DentPulse Advantage | Models reliefs into exit planning and safe take-home |
