Changes in Capital Gains Tax in 2024 – Points to Know

A few changes in capital gains tax were announced in the budget of November 2022. It was announced that the changes will take place in 2023 and 2024. Today, we will be taking a look at these changes. So, if you are reading and speculating about the differences, now is the time to go through this blog. With the information contained in this post, you will be able to maintain a healthy financial portfolio and make better decisions. However, if you think that you require a better portfolio management strategy or have further questions, you should book an appointment with your accountant.

Capital Gains Tax – Its Importance

Generally, Capital Gains Tax or CGT is implemented on the profits that you make when selling an asset that has given you a certain amount of profit.

CGT is mainly levied on the percentage of the returns that you have made. Thus, if you are aware of the changes, you will be able to take the right steps to minimise them. However, as mentioned already, modifying your portfolio or investment strategy can be cumbersome at times. For this reason, it is always best to discuss your requirements with a chartered accountant.

Changes in Capital Gains Tax

Let us now take a look at the changes that have been made in capital gains tax for FY 2023–24.

Now, the annual exempt amount for CGT for personal representatives and individuals has been reduced to £6,000 from £3,000. There is some speculation and information doing the rounds that in FY 2024-2025 there can be further reductions, such as £3,000 becoming £1,500.

Impact of the Changes

With these changes in the capital gains tax, according to many professional accountants in Reading, there can be a certain impact on your financial activity. For instance, you might have to rethink your investment decisions. You may need to re-evaluate the timing of your asset sales or consider diversifying your investment portfolio. If you have significant investments in assets, you might have to pay more CGT. Thus, tax planning is extremely necessary at present.

How Can You Mitigate the Impact of This Change?

With the resulting AEA reductions due to the changed CGT, you might need to develop certain strategies. But before making the final decision, you should discuss them with your chartered accountant.

Some of the steps that you can consider include:

  • Allowance Utilisation: Take advantage of the £3,000 AEA reduction. If you are planning to sell your assets and maximise the allowance, it can be a good move.
  • Managing the Sales Time: If you anticipate that the income from your assets will be lower in the year, you can consider delaying the sales of the same to lower the CGT rate.
  • Transfer of Your Assets: You can transfer your assets to your civil partner or spouse to reduce or spread CGT since transfers between partners are not taxed.

So, now that you have information about the changes in the CGT, making the right decisions will not be difficult for you.

Connect with Our Chartered Accountants Today

To get in touch with our chartered accountants at Biz Accounting Solutions Ltd, call us or send us an email now.