Autumn Budget: Capital Gains Tax Up To 24%

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Post on Oct 31, 2024

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Autumn Budget: Capital Gains Tax Up to 24% - What You Need to Know

The recent Autumn Budget brought a significant change to the UK tax landscape, with Capital Gains Tax (CGT) rates increasing for many individuals. This change affects anyone selling assets like shares, property, or valuable possessions.

Here's a breakdown of the key changes and what they mean for you:

Increased CGT Rates

Previously, the CGT rate for basic-rate taxpayers was 18% and 28% for higher-rate taxpayers. The new rates announced in the budget are:

• Basic-rate taxpayers: Now pay 20% on capital gains.
• Higher-rate taxpayers: Now pay 28% on capital gains.
• Additional rate taxpayers: Those earning over £150,000 will pay 28% on capital gains.

These changes come into effect for gains made after April 6, 2023.

Who Does This Affect?

These increased CGT rates impact a wide range of individuals, including:

• Property investors: Selling a second home or investment property will be subject to the higher CGT rate.
• Shareholders: Selling shares in companies, including those held in Individual Savings Accounts (ISAs) and pensions, will now be subject to the increased tax.
• Investors in cryptocurrencies: Selling cryptocurrency, including Bitcoin and Ethereum, will fall under these new CGT rates.

The Annual Exempt Amount

Fortunately, there's still an annual CGT allowance in place. This means you can make capital gains of up to £12,300 in the 2023/24 tax year without paying any CGT.

Implications for Your Finances

These changes will have a direct impact on your financial planning. Here are some key points to consider:

• Tax liability: Be prepared for potentially higher tax bills when selling assets.
• Investment strategies: The increased CGT may prompt a reassessment of your investment portfolio.
• Tax-efficient investments: Exploring tax-efficient investments like ISAs and pensions might be more attractive now.

What To Do Next

• Consult with a financial advisor: To understand how these changes will affect your specific circumstances.
• Review your investment portfolio: Identify potential capital gains and plan for the increased tax burden.
• Consider tax-efficient investments: Explore options like ISAs and pensions to minimize your future CGT liability.

The increased CGT rates are a significant change. By understanding the implications and taking appropriate steps, you can minimize the impact on your finances and maintain a solid financial plan.