Autumn Budget 2024 Capital Gains Tax Increases
Published / Last Updated on 04/11/2024
The capital gains tax annual exemption of £3,000 remains.
With effect from midnight on 30th October 2024, capital gains tax (CGT) rates have been increased for non-residential property investments to match residential property CGT rates.
Residential Property Investments
- CGT for basic rate taxpayers unchanged at 18%.
- CGT for higher rate and additional rate taxpayers unchanged at 24%.
Other Investments
- CGT for basic rate taxpayers increases from 10% to 18%.
- CGT for higher rate and additional rate taxpayers increases from 20% to 24%.
Business Asset Disposal Relief (formerly known as entrepreneur’s relief)
Currently, we all have a lifetime allowance of £1m for disposal of business assets with a lower rate of CGT under business asset disposal relief. This attracts reduced rates of CGT:
- CGT rates under business asset disposal relief remain at 10% until 5th April 2025.
- CGT rates under business asset disposal relief increase to 14% from 6th April 2025.
- CGT rates under business asset disposal relief then increase again to 18% from 6th April 2026.
Our Initial Thoughts:
- Make sure you use your capital gains tax allowance of £3,000 pa if you have potentially taxable gains on general investment accounts (GIAs), shares, cryptocurrency or other investments.
- You may wish to do this by placing some assets e.g., GIA funds or shares into your ISA to use your allowance and to make those investments tax free for the future.
- Transfers between legally married spouses/civil partners are CGT free. Transferring assets to your spouse will mean an extra £3,000 annual allowance and they may also be a lower rate taxpayer meaning their CGT rate is lower than your own.
- If you own a business and were planning to sell, do this before April 2025 if possible and April 2026 at the latest.
- Consider insurance investment bonds as they may offer lower taxation within the fund and tax advantages when you wish to withdraw capital and gains from the funds, assign ownership to others or even fully cash in.
- We have championed insurance bonds for a long time as one of our favourite investment vehicles and changes to capital gains tax and allowances over the last few years have only increased our like of them.
See: Insurance Bonds
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