Ben Oliver provides a brief summary of the key CGT changes
As was widely anticipated, the Chancellor announced a number of changes to Capital Gains Tax (CGT) and, in a less widely anticipated move, also announced that income tax thresholds will start increasing again. The key details are as follows.
Capital Gains Tax
The CGT headline is that the main rates are being increased from 10% (lower rate)/ 20% (higher rate) to 18%/ 24% , which will bring them in line with the current rates applicable to residential property. These changes apply with immediate effect.
Business Asset Disposal Relief and Investors’ Relief
For Business Asset Disposal Relief (formerly known as Entrepreneurs’ Relief), although the £1m lifetime allowance will remain in place, the rate will be increased to 14% in April 2025 and 18% in April 2026.
In addition, the rates for BADR’s sister relief, Investors’ Relief will be similarly increased, and the lifetime allowance for IR is being reduced from £10m to £1m with immediate effect.
Income Tax
Finally, in a somewhat unexpected move, the government has decided to not extend the freeze to income tax contribution thresholds. Accordingly, from April 2028, these personal tax thresholds will be uprated in line with inflation.
