Capital gains tax (CGT) in the UK is currently 18% on
property for basic-rate payers and 28% for higher or additional rate
payers.
With the general election on 12th December 2019, election manifestos are circulating with some parties pledging to increase CGT to 50% and maybe to lower the tax free allowance (currently £12,000) to £1,000.
Such a change would have a significant impact on taxes owed.
CGT on assets would also likely rise from the current level
of 10% for basic rate tax payers and 20% for higher or additional rate tax
payers.
If you are UK domiciled and thinking of selling assets or
property, we can discuss bringing those sales forward to ensure that you
benefit from the current CGT rates.
Labour’s plans also include the suggestion of scrapping
‘non-dom’ status.
If you are an ex pat and you have large gains on the
horizon, do get in touch with us. We can look into whether rebasing might suit
your circumstances, i.e. becoming UK domiciled.
What falls under CGT
rules
Capital Gains Tax is currently payable on property and
assets, including:
- Shares, bonds and funds outside an ISA or pension
- Jewellery, antiques, fine art
- Second homes, buy-to-let property
Assets such as expensive watches, cars or yachts are
currently exempt from CGT because they are deemed to have a useful life not
exceeding 50 years.
Other CGT relief
which may change with a new government
CGT on property and personal assets may not be the only tax
affected if we have a change of party after the general election.
Entrepreneur’s relief, introduced in 2008, could also be
affected. It currently works to reduce the tax rate when you sell shares in all
or part of your business, making the effective tax rate 10% instead of 20%, on
sales of up to £10m.
This is currently payable on:
- Business assets such as land and business
premises, plant and machinery, registered trademarks, and your business
reputation.
Labour’s plans for tax reform include scrapping this relief.
Contact us
Do
get in touch before you put assets on the market and we can discuss how this
could impact on your short-term and longer-term tax position. Give us a call
on 01761 241 861 or email us today.
We
will be pleased to advise you or to invite you into our offices in Paulton,
near Bristol and Bath, for a consultation.
