Speculation is increasing that the Chancellor’s next Budget will see a rise in Capital Gains Tax rates. According to a recent Canada Life poll of 2,000 adults across the UK, 83% of advisors expect some form of change to Capital Gains Tax, with 38% anticipating a rise to the same levels as income tax.
At the moment, Capital Gains Tax rates vary between 10-28%, depending on the taxpayer and the type of asset involved. In the past, CGT levels have been as high as 30%, or set at the same rate as income tax.
It is this change which advisors see as most likely to happen, following a report from the Office of Tax Simplification. If any such changes are put into force, Capital Gains Tax will, for many people, be charged at 40% or possibly even 45%.
A recommendation is just that and there is no guarantee that these changes will be made. With the costs of Covid to the country rising and the government looking for funding, though, it would be worthwhile considering your tax position. Any gifts or exchanges of CGT-burdened assets might be something to think about in the next month or two.
For any help with tax and later life planning please contact our dedicated team, or for more information visit our tax and later life planning page.
