Capital Gains Tax

Tax rates and allowances

As widely expected, the Budget announced a number of changes to the CGT rates. The government will introduce legislation in Finance Bill 2024/25 to increase the main rates of CGT from 10% and 20% to 18% and 24% respectively. The change will take effect for disposals made on or after 30 October 2024, subject to anti-forestalling measures.  

The rate of CGT for Business Asset Disposal Relief and Investors’ Relief is increasing to 14% for disposals made on or after 6 April 2025, and from 14% to 18% for disposals made on or after 6 April 2026. The lifetime limit for Investors’ Relief qualifying disposals is reducing from £10 million to £1 million for qualifying disposals made on or after 30 October 2024.

No changes will be made to the 18% and 24% rates of CGT that apply to residential property gains.  

The CGT annual exempt amount reduced from £6,000 to £3,000 from April 2024.

For a table of the main tax rates and allowances, see here.

Capital gains on liquidation of an LLP

The government has announced that for liquidations that commence on or after 30 October 2024, a deemed disposal will arise when a limited liability partnership is liquidated and assets that a member has contributed pre-liquidation are disposed of to the member or to a company or other person connected to them.

The chargeable gain that will arise to the relevant member will be equal to the gain that would have arisen at the time the asset was contributed to the limited liability partnership, had such contribution been treated as a disposal by the relevant member.

This change may potentially be connected with the recent decision of the First-tier Tribunal in GCH Corp Ltd and others v Revenue and Customs Commissioners.