Capital Gains Tax

Capital Gains Tax

Rates and annual exempt amount

As announced in the 2022 Autumn Statement, the CGT annual exempt amount will be cut from £6,000 in 2023/24 to £3,000 for 2024/25. The rates of CGT are unchanged at 10% for basic rate taxpayers and 20% for higher rate taxpayers on general assets.

The rate of CGT on disposals of chargeable residential property (such as second homes and rental properties) has been 18% for gains falling within a taxpayer’s basic rate band and 28% for higher rate taxpayers. The 28% rate is reduced to 24% for disposals on or after 6 April 2024. The Chancellor noted that the Budget forecasts suggest that this will result in more tax being collected, because it will encourage more people to realise capital gains.

The substantial reduction in the exempt amount (from £12,300 in 2022/23) will increase the tax payable, and it is also likely to require more people to complete self assessment returns in order to report chargeable gains. This in turn means that more people will need records of the purchase cost of assets which they bought long ago; the cost history of small shareholdings can be very difficult to track down.

Anyone with gains of more than the exempt amount has to report them. If gains are lower than the exempt amount, full details only have to be given in the CGT pages of a tax return if the individual’s total proceeds in the year from chargeable disposals exceed £50,000.