Capital Gains Tax Update

Capital Gains Tax Update

Back in July this year, The Chancellor of the Exchequer, Rishi Sunak, wrote to the “independent body” The Office of Tax Simplification (OTS) and asked them to carry out a review of the current capital gains tax regime. For those not familiar with the OTS it is an “independent” department of Her Majesty’s Treasury and the current head is David Halsey (on loan from HMRC!). This request letter and the 135 page report compiled by the OTS is linked below for background reading !

It is clear that The Chancellor sees this a revenue raising opportunity at a time when he perhaps has little other options. Capital gains tax revenue into the government coffers is only about 5% of the amount raised by income taxes each year, so you can see why this is a target for the Chancellor. There are many recommendations set out in the report including:-

  • Reducing the Annual Exemption of £12,300 to a significantly lower level
  • Possible alignment of rates of tax with income tax
  • The abolition of Business Asset Disposal Relief (Entrepreneurs Relief)
  • The removal of the capital gains tax exemption on death
  • Recategorizing some current capital gains events as income instead

The above list isn’t exhaustive but is enough reason for you to consider your current capital holdings and review whether you would be advised to make any changes prior to the next Budget in March 2021. It also is a timely reminder that there are many tax efficient investments that can be held as an individual, such as ISAs, that you have time now to put in place before any new legislation is enacted.

Please contact your Haslers Partner or other Team Member for further details or to arrange an immediate review.

Letter from Chancellor to OTS

Report from OTS

Why not follow us on social media to be kept up to date with our latest industry updates.

Facebook | LinkedIn | Twitter | Instagram 

Capital Gains Tax Update