From Morningstar: 2024-10-30 10:42:38

The chancellor confirmed an increase in Capital Gains Tax (CGT) rates for basic-rate and higher-rate taxpayers. The annual allowance remains at £3,000 per person.

UK adults have a £20,000 annual ISA allowance, which is frozen until 2030. Stocks and savings within an ISA are free of income and capital gains tax.

CGT is owed when an individual sells an asset for a profit. The tax is on the difference between the purchase price and the selling price.

There were no changes to the annual £3,000 allowance for CGT. Any profits above this amount are taxed at the individual’s marginal tax rate.

Rumors of a potential 40% CGT rate did not materialize. The current increase in CGT rates was perceived as measured by some fund managers.

In the last tax year, HM Revenue & Customs raised over £14 billion from CGT. Rising asset prices and frozen allowances may bring more people into the tax net in the future.

Investments held within an ISA, pensions, and certain bonds are exempt from CGT. The government has also extended schemes like EIS and VCT to 2035.

Private equity partners will face a 32% CGT rate on carried interest from April 2025. The government is also abolishing “non-dom” tax status from 2025.

CGT is a “voluntary” levy, as individuals can avoid triggering it by not selling assets. Financial advisers can help navigate the complexities of CGT rules.



Read more at Morningstar: Autumn Budget: Capital Gains Tax Changes Dominate