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In October 2024, Chancellor Rachel Reeves presented the UK's Autumn Budget, introducing significant tax reforms aimed at bolstering public finances and enhancing public services. Among these changes, Capital Gains Tax (CGT) underwent notable adjustments affecting investors and entrepreneurs.
Effective from 30 October 2024, the main CGT rates saw a substantial rise:
These changes impact individuals disposing of assets, resulting in higher tax liabilities on their gains.
It's important to note that CGT rates for residential property disposals remained unchanged:
This consistency provides some stability for property investors amidst broader tax changes. These rates had been expected to increase so it will be a relief to those affected that they did not.
The 60-day Capital Gains Tax (CGT) reporting requirement in the UK refers to a rule where individuals must report and pay any CGT due on the sale of UK residential property within 60 days of the completion date. This rule applies to disposals of properties that are not their primary residence or that do not qualify for full private residence relief.
We can assist with CGT calculations and advice, CGT Return filing and completion of Self Assessment Tax Returns.
The Budget also introduced modifications to reliefs associated with business assets:
It is advisable for individuals and businesses who think they may be affected by these changes to consult with tax professionals to understand the full implications and to plan accordingly.
When you gift an asset, such as a residential property, to a connected person, such as a family member, there are specific CGT and Inheritance Tax (IHT) consequences to consider.
Gift Holdover Relief is a tax relief available that allows individuals, and trustees in some circumstances, to defer the payment of CGT when they make gifts of certain assets, or transfers out of trust, to individuals or a qualifying trust. The relief is particularly useful for individuals who wish to transfer business assets, or gifts into trust which are classed as chargeable lifetime transfers, while reducing their immediate tax liabilities. This relief defers CGT on the gifted assets until the recipient disposes of them, allowing for more flexible tax planning and no upfront CGT cost when there may not be funds available to pay the CGT. A claim for the relief is usually required by both parties and there are certain processes to follow in order to do so.
Gifting to a connected person can trigger both CGT and IHT consequences, including the application of the market value rule for CGT and the possibility of IHT if the donor dies within 7 years. It also gives opportunities to make use of trusts and gift holdover relief to reduce the upfront tax cost, however, it all depends on the circumstances.
It’s important to consult with an experienced tax advisor when making significant gifts to ensure proper planning. For advice you can count on...Think Hegarty.
Whatever legal support you need, our experienced and highly skilled solicitors and legal advisors are here to help. With expertise across a wide range of legal areas, we provide clear, practical advice tailored to you. What sets us apart is our commitment to understanding your needs and delivering the best possible outcome with a personal touch.