Capital Gains Tax changes – what you need to know
Capital Gains Tax changes - what you need to know
The Treasury's 2022 Autumn statement, announced cuts to the annual Capital Gains Tax (CGT) allowances for this coming tax year (2023/2024).
This measure changes the CGT annual exempt amount (AEA).
- For the tax year 2023 to 2024 the AEA will be £6,000 for individuals and personal representatives, and £3,000 for most trustees.
- For the tax year 2024 to 2025 and subsequent tax years the AEA will be permanently fixed at £3,000 for individuals and personal representatives, and £1,500 for most trustees.
- The dividend allowance is also expected to be halved to £1,000 from April 2023, reducing further to £500 from April 2024.
The measure also fixes the CGT proceeds reporting limit at £50,000.
Currently the AEA for CGT is £12,300 (£6,150 for Trusts) meaning that you pay CGT on any gain exceeding this amount and it needs to be reported to HMRC within 60 if the asset is sold after October 2021.
These upcoming changes will have a huge impact on the administration of estates given the substantial cuts that will be imposed. The sale of houses, investments, shareholdings and other assets will all be affected from 6 April 2023.
Individuals, Trustees, Landlords and Investors will need to be aware of how this may affect them and take advice where appropriate.
If you require further information or have any concerns, please do get in touch with a member of our Wills, Trusts and Probate Team....
Keri Wood - Associate - Wills, Trusts and Probate Team