With some potential changes to the regime that may be coming into force, we post this to hopefully give you some time to plan for such changes should they affect you.
We expect the Government is planning to increase tax revenues in response to the significant funding of its Covid-19 response and now that the UK public debt has exceeded two trillion pounds. Some of the recommendations released include simplifying the CGT regime and potentially increasing CGT rates.
The recommendations include
This could mean that when selling your business, buy to let property, or shares held outside a pension or ISA, rather than paying CGT rates of 10% – 28%, you could end up paying income tax rates of 20% – 45%, resulting in a substantial increase in your tax liability.
The exact changes to CGT are unknown at this time but we know that any changes could be applied before 6 April 2021. If you are planning any substantial capital transactions in the short term it would be prudent to speak with us to discuss if specialised tax planning could mitigate the risks that these changes may bring.
The ways of reducing your overall CGT could be: