Autumn Budget: Focus On Capital Gains

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Post on Oct 30, 2024

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Autumn Budget: What's New for Capital Gains?

The Autumn Budget is always a big deal, and this year was no different. With the cost of living crisis in full swing, everyone was on edge about what the government would do. But one thing that didn't get as much attention was the changes to Capital Gains Tax (CGT). For those who haven't been following closely, CGT is the tax you pay on profits from selling assets like shares, property, or even valuable collectibles. It's a complex area, and things are getting even more complicated. So, let's dive into what's changed and what it means for you.

The Big Changes: What You Need to Know

The main takeaway? The Chancellor, Jeremy Hunt, hasn't made any big changes to the actual CGT rates themselves, but he's tweaked some of the thresholds. What does this mean in plain English?

• The Annual Exempt Amount (AEA) remains the same. This is the amount of profit you can make each year without paying CGT. It's £12,300 for the 2023/24 tax year.
• No more doubling the AEA for trusts. Previously, trusts could benefit from a doubled AEA, but that's gone.
• New rules for entrepreneurs' relief. This scheme, which offered a reduced CGT rate on qualifying business assets, has been significantly restricted.

The Impact: How It Affects You

So, how does this impact you? It depends on your situation, but here's the lowdown:

• If you're a high earner: These changes might bite, especially if you're making significant profits from selling investments or property.
• If you're a small business owner: The changes to entrepreneurs' relief could mean paying more CGT on your business assets.
• If you're a trust beneficiary: You might be feeling the squeeze with the AEA change.

The good news? The government is trying to simplify CGT for individuals, so things could get easier in the future. But for now, it's worth keeping an eye on these changes, especially if you're planning on selling any assets.

Taking Action: What You Can Do

• Get expert advice: Don't try to navigate this alone! A qualified accountant or financial advisor can give you tailored advice for your situation.
• Plan ahead: The earlier you plan, the better. If you know you're going to be selling an asset, consider structuring things strategically to minimize your CGT bill.
• Stay informed: Keep up with the latest news and announcements from the government.

The Autumn Budget hasn't thrown a complete curveball at CGT, but it's definitely worth understanding the changes. This isn't a subject to ignore. Taking the time to learn and adapt could save you a lot of money in the long run.