Changes To Capital Gains Tax (CGT)
28th March 2025
The 2024 Autumn Budget made several announcements in relation to Capital Gains Tax (CGT) all of which were re-affirmed in the 2025 Spring Statement. Most of these are due to commence from 6th April 2025 and here is a reminder of the changes.
Business Asset Disposal Relief:
Business Asset Disposal Relief, previously known under the guise of Entrepreneurs’ relief, the effect of which reduces the rate of Capital Gains Tax on disposals of businesses or business assets. In the Autumn Budget the government announced it was taking a two staged approach to increase Capital Gains Tax rate on disposals that qualifying for the relief.
The Capital Gains Tax rates will increase from 10% to 14% for qualifying disposals made on or after 6th April 2025 and then will increase again from 14% to 18% for qualifying disposals made on or after 6th April 2026.
Carried Interest:
Carried interest is a share of profits earned by managers of private equity, venture capital and hedge funds, it is a performance-based fee rewarding the manager based on profits earnt on the investments.
The two Capital Gains Tax rates (18% and 28%) on carried interest will be replaced with a single tax rate of 32% from 6th April 2025.
Anti-Forestalling:
The government also announced broad anti-forestalling measures applying to various types of disposals such as property, shares and businesses. Which alter the timing of certain disposals for CGT purposes. The standard timing rules for a disposal will not apply to unconditional contacts entered into on or before and then completed after 30th October, this is to stop individuals paying the old lower rates of Capital Gains Tax.
I will be discussing anti-forestalling in more detail in my upcoming blog.
Get In Touch
If you have any questions on the topics above, please do contact your local Whitings office today.
Disclaimer - All information in this post was correct at time of writing.
