Capital Gains Tax (CGT) threshold update

The Autumn 2022 statement announced that the allowance for Capital Gains Tax (CGT) for individuals and Personal Representatives, will decrease from £12,300.00 to £6,000.00 in the tax year commencing April 2023. It will reduce further to £3000.00 from April 2024.

Implications

If you have shares or investments and they increase in value on sale (and you therefore make a “gain”) you will have more tax to pay from 6 April 2023.

The same will be true for Personal Representatives (including administrators and executors) who sell a property in the course of dealing with an estate. Under the new rules the estate will have more CGT to pay if a property has increased in value from the date of death to the date of sale.

Actions to mitigate CGT increase

There are ways to mitigate CGT.

We can, for example, prepare a document so that instead of the Personal Representatives selling the property, it would be transferred to the beneficiaries who are inheriting it. This would occur prior to exchange of contracts.

This would allow use of each beneficiaries’ own allowances, rather than just relying on the estates’ one allowance.

It is always worth speaking with your accountant and we are used to working with other specialists, to help you find practical and tax efficient solutions.

For more advice please contact our Private Client department.