The Autumn Finance Bill was published on the 22 November 2022 and legislates a number of changes to the taxation rules currently enacted.
The Chancellor has made the following changes to the Capital Gains Tax (CGT) Annual
Exemption Allowance:
- Effective from April 2023 the annual exempt amount will be reduced from £12,300 to £6,000 for individuals and personal representatives, and £3,000 for most trustees.
- A further 50% reduction is road mapped to take effect from April 2024 such that the annual exempt amount will be £3,000 for individuals and personal representatives, and £1,500 for most trustees.
Current Position
CGT is triggered on the chargeable gain made when selling or gifting certain assets that have increased in value.
These include personal possessions worth more than £6,000; a property that is not your main home (unless it has been let out, used for business or is very large); shares (excluding ISAs or PEPs); and business assets. There are certain exemptions and reliefs that may be applied dependent on the nature of the asset.
CGT is paid on the gain which exceeds the annual tax-free allowance. The rate at which CGT is calculated depends on the income status of the individual (see table below).
Rates:
| Assets | Basic Rate | Higher Rate |
| Shares and other chargeable assets | 10% | 20% |
| Residential property | 18% | 28% |
How this affects you
The changes to the CGT legislation could mean that you will pay more tax when selling or gifting an asset from April 2023 onwards.
If you are considering disposing of an asset the timing is crucial. A prudent approach would be to take professional advice in a timely manner. Child & Child are proactively assisting current and new clients with tax overviews of their estate in efforts to minimise future tax liabilities.
Given the time sensitivity of these transactions, you can contact me via email for a same day reply.
Email address: RheaRughani@childandchild.co.uk