The Chancellor’s Autumn Budget brought big changes to Capital Gains Tax (CGT), with immediate rate hikes affecting basic and higher-rate taxpayers.
For basic-rate taxpayers, the CGT rate has jumped from 10 per cent to 18 per cent, while higher-rate taxpayers now face a CGT rate of 24 per cent, up from 20 per cent.
Notably, the CGT rates for residential property sales remain the same, but these new rates will apply to most other asset sales, including business shares.
Changes to business reliefs
Business owners selling their companies have traditionally benefitted from Business Asset Disposal Relief (BADR), previously known as Entrepreneurs’ Relief, which allowed qualifying gains to be taxed at 10 per cent.
While BADR remains in place for now, its benefits will gradually decrease as rates rise. From April 2025, the BADR rate will increase to 14 per cent, and by April 2026, it will match the main CGT rate at 18 per cent.
Is there room to plan around CGT changes?
With the changes in CGT taking effect immediately, individuals selling personal assets have little room for manoeuvre.
However, business owners considering a sale may still benefit from reviewing their plans – selling sooner could mean taking advantage of the current, lower BADR rates.
If you are considering the sale of your business, speaking with our experienced accountants can help you make the most of available reliefs and manage your tax liabilities.
To explore your options with CGT planning, reach out to us today.
