Tax rates and allowances
The government has previously announced that the CGT annual exempt amount will reduce from £6,000 to £3,000 from April 2024.
However, the Spring Budget announced that the higher rate of CGT on UK residential property disposals will be reduced from 28% to 24% with effect from 6 April 2024.
For a table of the main tax rates and allowances for 2024/2025, see here.
Higher rate CGT on UK residential properties
The government has announced that the higher rate of capital gains tax on gains from residential property will be reduced from 28% to 24% for gains accruing on or after 6 April 2024.
This measure does not change the lower 18% rate of capital gains tax which applies to the part (if any) of the gain that falls within an individual’s unused basic rate band. It also does not impact the application of private residence relief to effectively relieve some or all of the gain where the property has been the main residence of the individual for some or all of the period for which they have owed the property. Finally, this measure does not change the rate of tax applicable to residential property gains accruing to trusts and personal representatives, which remains at 28%.
The government’s stated rationale for this change is to encourage disposals of second homes, buy-to-let properties and other residential properties which do not fully benefit from private residence relief, thereby increasing the volume of transactions in the residential property market. It remains to be seen whether this policy objective will be achieved.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.
Key contacts
If you have any questions, contact a member of the Capital Gains Tax team for assistance:
