What has been announced?
The autumn budget announced that the rates of
Capital Gains Tax (CGT) are to be increased with immediate effect. The main rates of CGT that apply to assets other than residential property and carried interest
will increase from 10% to 18% (for Income Tax basic rate payers) and from 20% to 24% (for Income Tax higher rate payers). The capital gains tax changes are applicable for disposals made on or after 30 October 2024.
What are the new rates of Capital Gains Tax?
The rate of CGT that applies to trustees and personal representatives also increases from
20% to 24% for disposals made on or after 30 October 2024. The rates of CGT that apply to residential property disposals (18% and 24%) remain unchanged. The new rates will now mirror these rates as had historically been the case.
What CGT rates apply to BADR?
The capital gains tax (
CGT) rate for
Business Asset Disposal Relief and Investors’ Relief will increase from 10% to 14% for disposals made on or after 6 April 2025, as announced in the autumn budget. There will then be a further increase, from 14% to 18% for disposals made on or after 6 April 2026. There were no changes announced to the lifetime limit for
Business Asset Disposal Relief, which remains at a £1 million lifetime limit. However, the lifetime limit for Investors’ Relief has been reduced from £10 million to £1 million for IR qualifying disposals made on or after 30 October 2024.
Special Provisions for Pre- and Post-October 2024 Contracts
There are special provisions for contracts entered into before 30 October 2024 but completed after that date for the main rate changes, and for contracts entered into on or after 30 October 2024 for the phased rate change that applies to Business Asset Disposal Relief and Investors’ Relief. There are also special provisions for share reorganisations and exchanges where an election is made.
It was further announced that the normal and higher rates of CGT on carried interest (currently 18% and 28% respectively) will increase to a single unified rate of 32% from 6 April 2025. From April 2026, carried interest will be subject to a wider package of policy changes that will be announced at a later date.
Want Expert Advice on Capital Gains Tax Changes from the Autumn Budget? Contact Us Today!
The recent adjustments to Capital Gains Tax (CGT) in the Autumn Budget, including Business Asset Disposal Relief (BADR) updates, could directly impact your financial planning. Whether you're considering the sale of business assets or other investments, understanding the latest CGT rules is critical to maximising your gains and minimising your tax liabilities.
Our team at Moore South specialises in navigating
Capital Gains Tax implications and providing strategic advice on Business Asset Disposal Relief. Given the
latest Autumn Budget updates,
contact us today to ensure you make the most informed decisions regarding CGT and
BADR.
Reach out now for expert support in managing your capital gains and securing your financial future.