McPhersons is now part of Galloways Accounting. We’re looking forward to sharing the next stage of our journey with the Galloways group, and share their vision for helping you, our clients, to have more time to enjoy the things you love.
McPhersons is now part of Galloways Accounting. We’re looking forward to sharing the next stage of our journey with the Galloways group, and share their vision for helping you, our clients, to have more time to enjoy the things you love.
March 12, 2024
Download our new CGT flyer for 2024 here.
The Spring 2024 Budget announced some further changes to Capital Gains Tax for higher rate taxpayers only.
What is Capital Gains Tax?
According to HMRC website, ‘Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.
It’s the gain you make that’s taxed, not the amount of money you receive. For example, if you bought a painting for £5,000 and sold it later for £25,000, you’ve made a gain of £20,000 (£25,000 minus £5,000).’
With regards to CGT for property, we are dealing with the sale of property that is not your private residence.
What’s changing in 2024?
Annual exemption
The capital gains tax (CGT) annual exemption will drop to £3,000 in 2024/25, down from £6,000 in 2023/24. This change will mean that those selling capital assets such as property or shares will pay more tax.
Rates
The main rates of CGT remain at 10% for basic rate taxpayers (or those disposing of a business that qualifies for Business Asset Disposal Relief) and then 20% in most other cases.
However, increased rates apply when the asset being sold is a residential property that is not your private residence. From 6 April 2024, the residential property CGT rate will remain at 18% for basic rate taxpayers but will reduce from 28% to 24% for those with residential property gains falling outside of their basic rate band.
This measure is intended to generate more transactions in the property market, benefitting those looking to move home or get on the property ladder.
60 day payment reminder
Remember, for property disposals that give rise to CGT, tax payment and reporting obligations can arise just 60 days after your completion date so make sure you take advice in good time.
