In July, Chancellor Rishi Sunak announced that he was focussed on support measures instead of revenue raising. However, a consultation on future tax provision was widely anticipated ...
The first tax measure to be reviewed is Capital Gains Tax. The consultation runs until the 10th August 2020 and the second part, covering technical details and operations, continues until the 12th October 2020.
The timings show that the Chancellor is intending to announce any changes in the Autumn Budget, with potential Capital Gains Tax changes brought into law immediately or, more likely, on the 6th April 2021.
Within my own peer group of tax advisers, talk is of Principal Private Residence Relief which means that when you sell your main (and only) home, you won't get taxed on it. Rumour says PPR Relief may be abolished, though this would be a hugely unpopular move by the Chancellor and is considered politically risky.
There are easier targets he could go after. The removal of CGT free uplift of assets passing on death could go, especially those sheltered by a number of Inheritance Tax reliefs. The OTS has included this in their report stating that the effects of gifts during lifetime and transfers on death should be equalised.
There could be changes to the newly introduced 30-day Capital Gains Tax reporting period on the sale of UK residential property. Bringing this under Making Tax Digital could create a windfall in tax collection.
There could also be rate increases and other harmonistions. Residential property is already subject to punitive taxes compared with other assets (usually 28% compared with 20%), but both are usually favourable compared with the top rates of Income Tax.
CGT is also considered a rich tax by the general public and is not subject to the Government's triple-lock so this could easily be tweaked and changed without many objections!
And finally, Business Asset Disposal Relief (Entrepreneurs' Relief) was reduced from £10m to £1m during the Spring Budget 2020. If you can remember that far back then this became a lifetime allowance rather than a yearly one and could potentially be abolished to raise more tax revenue.
The only people who really know what's going to happen is Rishi Sunak and the people who work for him. With the Coronavirus outbreak still flaring up around the country and support schemes still running (albeit many are ramping down now), predicting the Chancellor's announcements is quite a difficult ask in light of the amount of money he has spent supporting the nation.
My advice would be to get any transactions subject to Capital Gains Tax moving sooner rather than later.
If you'd like to find out more about anything I've written here, do call me on 01908 774323 or leave a comment below and let's see how I can help you.