Autumn Budget 2024 - Capital Gains Tax | Travers Smith

Before the Budget was revealed, there was a lot of talk about the Chancellor possibly overhauling the Capital Gains Tax (CGT) system, whether by raising rates significantly or by cutting existing reliefs drastically—or even doing both. However, it appears that most people will see the changes to CGT announced in the Budget as rather minor compared to what the government could have implemented. It’s unlikely that these new measures will lead to a major shift in how taxpayers behave because there is still a big gap between the highest income tax rate (45%) and the capital gains tax rate (24%).

Today, the Chancellor unveiled a set of modifications to Capital Gains Tax aimed at increasing government revenue. Some of these changes will be implemented right away, while others will be introduced gradually over time.

New CGT Rates Start On Budget Day, Oct 30, 2024

Updates To BADR And Investors' Relief CGT Rates

As often happens when rates go up, the new laws include measures to prevent individuals from bypassing these increases through certain agreements. These measures aim to invalidate any arrangements that taxpayers might have made to take advantage of the old rates before the budget changes. An example of such arrangements could be the use of contracts that are unconditional but still unfinished, made prior to October 30, 2024.

The capital gains tax rates for selling residential properties, which are 18% and 24%, have not been altered.

The Chancellor also revealed that there will be higher capital gains tax rates for carried interest. To find out more about this, click here.