Autumn Budget: Key Changes To Capital Gains

Neomam Admin

You need 2 min read

·

Post on Oct 31, 2024

44 visitor like this post

Share

Autumn Budget: Key Changes to Capital Gains

The Autumn Budget 2023 has brought a number of changes to the UK's capital gains tax (CGT) regime, impacting both individuals and businesses. These changes are aimed at raising revenue and encouraging investment in certain areas. Here's a breakdown of the key changes to be aware of:

Changes to the Annual Exempt Amount

The most significant change announced in the budget is the reduction of the annual exempt amount for Capital Gains Tax from £12,300 to £6,000. This means that from April 2024, you will only be able to make £6,000 in capital gains each year before you start paying CGT.

This reduction will impact many individuals, particularly those who sell assets like shares or property during the year. It's important to note that this applies to both residential and non-residential property, meaning that even selling your home will now contribute to your annual allowance.

Changes to Business Asset Disposal Relief (BADR)

Previously, the Business Asset Disposal Relief (BADR) allowed individuals to pay CGT at a 10% rate on the first £1 million of gains from qualifying business assets. This relief has been reduced to £500,000, meaning that gains exceeding this amount will be taxed at the standard CGT rate.

This change is likely to have a greater impact on entrepreneurs and small business owners who are looking to sell their businesses or parts of their businesses.

Increased CGT on Unlisted Shares

For investors who own unlisted shares, there will be an increase in CGT rates, moving from 10% to 20% for basic rate taxpayers and 28% to 30% for higher and additional rate taxpayers. This change is designed to encourage investment in listed companies, where the tax rate remains unchanged.

Impact on Investment Strategies

These changes will undoubtedly influence investment strategies, pushing investors to seek alternative ways to manage their capital gains. For example, individuals may consider holding assets for longer to avoid triggering CGT or exploring tax-efficient investment options like ISAs and SIPPs.

Key Takeaways

The Autumn Budget 2023 has brought about significant changes to the CGT landscape, with the reduction of the annual exempt amount, changes to BADR, and increased rates for unlisted shares. These changes will impact both individuals and businesses, prompting them to re-evaluate their investment strategies and tax planning.

It's important to seek professional advice to understand the specific implications of these changes on your personal financial situation. The new rules will come into effect in April 2024, so individuals and businesses have time to adjust their plans accordingly.