Eyes now looking towards the Autumn Statement and impact on Capital Gains Tax
In around three months time the Chancellor (we're assuming for now it will still be Rishi Sunak!) will deliver his autumn statement, and while he will continue to try and strike a balance between growth and paying for the cost of the pandemic, there will be that now familiar speculation about the future of Capital Gains Tax as there was before the March budget.
Indeed in March, CGT was left relatively untouched, however since then we have seen CGT rates in the US almost double from 20% to 39.5% for those earning more than $1 million under one of President Biden's early reforms and many suspect the UK will not be far behind.
The main driver for the speculation in March was the Chancellor's instruction to the Office for Tax Simplification (OTS) to carry out a thorough review of the Capital Gains Tax system in the country last July. The OTS published it's findings towards the back end of the year and suggested several areas where Capital Gains Tax Revenue could be increased - primarily by
aligning CGT rates more closely to income tax rates;
reducing the CGT tax-free allowance;
removing the ‘CGT uplift’ on inherited assets; and
reassessing existing CGT reliefs.
More detail on the findings here
We therefore could see an outline proposal for any one or a combination of these measures be floated in the Autumn statement as we remain alert to the possibility Capital Gains Tax to be overhauled. In such an event we will of course be reviewing the effects of any changes on a case by case basis and helping clients navigate any changes and what it means to them.