Capital Gains Tax Changes
24 April 2025
Significant adjustments to the UK's Capital Gains Tax (CGT) regime have come into effect from 6 April 2025, impacting investors, business owners, and trustees.
Revised CGT Rates
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Basic Rate Taxpayers: The CGT rate has increased from 10% to 18% for gains falling within the basic income tax band.
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Higher Rate Taxpayers: For gains exceeding the basic rate threshold, the CGT rate has risen from 20% to 24%.
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Trustees and Personal Representatives: CGT on disposals by trustees and personal representatives has increased from 20% to 24%.
Business Asset Disposal Relief (BADR) Adjustments
Business owners should note the following changes to BADR:
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From 6 April 2025: The CGT rate for qualifying disposals under BADR increased from 10% to 14%.
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From 6 April 2026: The rate will further rise to 18%.
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These changes affect entrepreneurs planning to sell or transfer their businesses.
Implications and Planning
The increased CGT rates may influence decisions regarding asset disposals. Individuals and businesses should consider:
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Timing of Disposals: Evaluating whether to advance or delay asset sales based on the new rates.
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Utilizing Allowances: Making full use of the annual CGT exemption, which remains at £3,000 for the 2025/26 tax year.
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Strategic Planning: Consulting with tax advisors to explore reliefs and exemptions that may mitigate CGT liabilities.
Staying informed and proactive is essential to navigate these changes effectively.