UK Budget: Capital Gains Tax Update

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Post on Oct 30, 2024

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UK Budget: Capital Gains Tax Update - What You Need to Know

It's that time again - the UK budget has landed, and with it, a whole host of changes to taxes, including some pretty big updates to Capital Gains Tax (CGT). If you've been holding onto some investments or selling off property, you'll want to pay close attention to these changes. Let's break it down, shall we?

What's Changed?

The biggest change is the annual allowance for CGT, which has been slashed from £12,300 to just £6,000. That's a massive cut, and it means you'll be paying more tax on your gains if you're a regular investor or property flipper.

But wait, there's more! The rates for CGT haven't changed, but they're still pretty high. The basic rate is 18%, while the higher rate is 28%. For non-residents, the rates are 28% and 40%. This means that, depending on your income and the amount of capital gains you're realizing, you could be paying a significant chunk of your profits back to the government.

So, what does this all mean for you?

What This Means For You

Firstly, if you're thinking of selling any assets in the near future, it might be worth holding off until after April 2023. This would give you a chance to use the higher annual allowance before it gets cut in half.

Secondly, if you're a regular investor, you might want to consider diversifying your portfolio. Investing in a mix of assets can help spread the risk and potentially reduce your overall CGT liability.

Finally, it's always a good idea to talk to a financial advisor to see how these changes might affect your specific situation. They can help you create a plan that minimizes your tax bill and helps you reach your financial goals.

Don't Panic!

The changes to CGT might seem daunting, but they shouldn't send you into a panic. By understanding the new rules and taking appropriate action, you can still make the most of your investments and manage your taxes effectively. Remember, it's all about being informed and proactive.

This article is for informational purposes only and should not be considered financial advice. Always consult a qualified professional before making any financial decisions.