Jeremy Hunt set to announce ‘tax crackdown’ including CGT hike

Jeremy Hunt

The chancellor Jeremy Hunt is expected to announce a series of changes to taxes next month as part of the government’s Spring Budget, including a reduction to the allowance for capital gains tax (CGT).

People currently pay capital gains tax on their overall gains above the tax-free allowance, which as it stands is £12,300 a year for most taxpayers and £6,150 for trusts.

In April of this year, the tax allowance for CGT is set to be halved to £6,000 annually in a bid to generate more revenue for the government.

Furthermore, this reduced capital gains tax allowance will be cut even further to £3,000 a year from April 2024.

Earlier this week, HMRC published its latest tax data which revealed that the UK is paying a record amount in CGT.

Some £13.2bn was paid by taxpayers in January 2023, up 24% year-on-year.

Laura Suter, head of personal finance at AJ Bell, commented: “This year is shaping up to be a bumper tax-year end as people are wary of the cut to allowances in April and are also fearful of a further crunch on wealth taxes in the upcoming Budget

“It means many investors will be cashing in gains up to that limit before the tax year is over, as if you don’t use it you lose it. However, anyone just cashing in gains up to their tax-free limit wouldn’t incur CGT and so wouldn’t add to these figures.

“But many investors sitting on significant gains are likely to have cashed them in sooner, in the knowledge that the tax environment will be harsher come April.

“The exodus of landlords from the buy-to-let market will also contribute to these figures, as individuals sell second properties ahead of the April deadline.”

This year’s Spring Budget will take place on 15 March.

 

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One Comment

  1. AcornsRNuts

    They really are determined to lose the election, aren’t they?

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