Capital gains tax alert as Rishi Sunak may ‘redress the balance’ by enacting massive HIKE | Personal Finance | Finance
Capital gains tax is a tax on the profit when someone sells an asset which has increased in value. It is the gain which is taxed, rather than the amount of money a person has received.
CGT is currently 28 percent on gains from residential property, and 20 percent on gains from other chargeable assets.
However, with the Chancellor’s spring statement looming in the coming week, experts believe the current rate of CGT could be at risk.
Express.co.uk spoke exclusively to Christine Ross, Head of Private Office – North at Handlesbanken Wealth Management, who said: “The issue of capital gains tax has not gone away. All experts are talking about it.
“While this is speculation, capital gains tax could well be on the Chancellor’s agenda.
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But the expert stressed those with a good offer should act as “the tax is only going to go one way: up”.
Capital gains tax and its future remains a significant concern for many people in the spring statement and subsequent budgets.
It is the current climate which may spark a change in the levy when it has been left alone recently.
Ms Ross continued: “Currently, there are cost of living increases, inflationary pressures and a higher tax burden overall.
“While I am not being political, capital gains tax is usually associated with the wealthier parts of society.
“I can’t help but think even if it doesn’t raise a huge amount of money, the Treasury will tweak this.
“It will likely be in the minds of the decision-makers to redress the balance going forward.
“That is why I think it could go up in the future.”
Ms Ross believes any change to CGT may occur at the start of a tax year to avoid unnecessary confusion.
She added: “You can’t have a situation where someone has sold their business and then months down the line tell them the CGT rate has gone up and being backdated.
“If it is implemented in a split year it could get very messy.”
However, Ms Ross would not be surprised if the Chancellor announced a CGT rise in advance of it actually taking effect.
This, she said would provide people with the opportunity to plan, but could also prove advantageous for the Government.
She concluded: “This is because the rush to realise gains actually accelerates a tax take for the Treasury.
“This would be good for them, especially post-pandemic.”
