Capital gains tax receipts tipped to soar

16 Mar 20

Changes to entrepreneurs’ relief are being tipped to contribute towards a large rise in capital gains tax receipts over the coming years.

The lifetime limit on qualifying disposals eligible for the lower 10% capital gains tax rate was reduced last week, from £10 million to £1m.

As a result, capital gains tax receipts are expected to reach around £15.7 billion in 2023/24 – up from £3.9bn ten years’ earlier in 2013/14.

Other contributing factors include the phased changes to mortgage interest relief, which has forced some landlords to sell buy-to-let properties.

Changes to letting relief and the final-period private residence relief exemption, both of which kick in for 2020/21, will boost the Treasury’s coffers.

Spouses or civil partners can share ownership of assets to reduce their bills, as can staggering the sales of assets across tax years.

Sean McCann, chartered financial planner at NFU Mutual, said:

“Capital gains tax catches many unaware and those selling or giving away property or investments often end up paying more than they need to.

“Much of the projected increase will be down to the slashing of entrepreneurs’ relief.”

Talk to us for capital gains tax planning advice.

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