Capital Gains Tax Consultation Underway
Should be acted upon at the Autumn Budget ...
Posted by Helen Beaumont on 05/08/2020 @ 8:00AM
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 ...
There may be some dramatic changes to Capital Gains Tax coming at the Autumn Budget!
copyright: bowie15 / 123rf
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.
"Anyone with views on the system is free to contribute!"
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.
"With 4 years to go to the next election, he may chance it!"
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.
"Ok! This is all speculation!"
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.
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about Capital Gains Tax, call me on 01908 774323, leave a comment below or click here to ping over an email and let's see how I can help.
About Helen Beaumont ...
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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