CAPITAL GAINS TAX ALLOWANCE SLASHED BY OVER FIFTY PERCENT IN CHANCELLOR’S AUTUMN STATEMENT
Now even those with modest share portfolios might find themselves paying CGT for the first time
Chancellor Jeremy Hunt decided in his Autumn Statement 2022 to reduce the capital gains tax (CGT) allowance. CGT is a tax on any gain made when a person sells or disposes of an asset that has increased in value. With tax payable on any gain, the tax-free allowance will be reduced from £12,300 to £6,000 from April 2023 and from April 2024 will be set at £3,000.
“CGT was always going to be a potential target for the Treasury, with a ‘cost of living crisis’ putting the majority of UK households under extra budgetary pressure, the optics in targeting CGT, given it is paid by fewer people, are clear.” said Partner and Head of Wealth Protection at Price Slater Gawne, Laura Bywater.
She added: “Those who now fall within the CGT remit will certainly have to consider timing the ‘disposal’ of their assets in the most tax efficient way. They may even hold-off selling assets altogether during these unfavourable conditions. However, as there is time before the changes take effect in April 2023, I foresee a rush in those wishing to dispose of assets before this date, to crystalise their gains in advance of the implementation date.”
“Even those with the ‘modest share portfolios might find themselves paying CGT for the first time. It will be new territory for many”
Laura continued: “Since Trusts are eligible for half the CGT allowance of an individual, the same concerns above apply to trustees as well. Trusts will certainly be a useful tool in CGT planning here, as they can be used to quickly crystalise the gain on a disposal under the current regime and before the implementation date of the less favourable new regime.”
Commenting on the speculation in the run up to the Autumn Statement, Laura concluded: “Pre-Autumn statement, I had leaned towards the idea that the Treasury may increase the actual rates of CGT itself, possibly in line with inheritance tax (currently at 40%) or income tax rates, as this would have been a much more lucrative option. However, it is a very surprising move nonetheless as it is unlikely to raise significant revenue to plug the £55bn hole in public finances.”
Led by directors Victoria Price, Mark Slater and Christopher Gawne, Price Slater Gawne is an Altrincham-based Law firm founded in 2010 and offers legal expertise in the fields of Wealth Protection, Court of Protection, Clinical Negligence, Serious Injury, Divorce & Family Law.
Price Slater Gawne has grown significantly over the past two years, recruiting at all levels. In the past two years revenue has grown by 64% and headcount has doubled to 70.
The firm is recognised in the prestigious legal directories Chambers and Partners and Legal 500 and is noted for its work on multiple complex and high-profile cases.
