17 November 2022
If you are covering the changes in Capital Gains Tax announced in the Autumn Statement, please see the following comment from Rachael Griffin, tax and financial planning expert at Quilter:
"As was expected the Capital Gains Tax allowances have been slashed to help plug the fiscal blackhole the UK is suffering. It was ripe for the chopping block as just 323,000 taxpayers in 2020/21 suffered a CGT charge and so will not turn out to be politically damaging when the Conservatives need to help bolster their image with the general public.
"The annual tax-free allowance for capital gains will be cut from £12,300 to £6,000 next year and fall to £3,000 from April 2024. This will spell bad news for anyone looking to sell shares, other assets or second homes.
"Take for example a second homeowner who bought their property five years ago for the average house price in 2017 of £227,000. They would have made a gain of £67,559 at today’s average house price of £294,559 and therefore next year when the allowance is cut to £6,000 would pay £17,236 in CGT and if they sold the year after would pay £18,076 when the allowance is £3,000 assuming they are higher rate taxpayers.
"These changes will only come into effect from April 2023 so while the sale of a second property is hard to shield from these changes to CGT, there is still time use up ISA allowances which would be exempt from CGT altogether if you were to sell shares. So the message after today’s budget is seek advice and make changes while you still can."
