Watch Our Expert Q&A

To help you navigate these potential changes, we’ve recorded a 4-minute Q&A session with our tax expert, Richard Lupson-Durnell. In this video, Richard shares his predictions for the Autumn Budget and offers practical advice on how to protect your wealth. A summary of the video features below.

As we approach the Autumn Budget on October 30th, 2024, there is growing expectation that the UK Government will introduce significant changes to capital taxes. With an approximate £22 billion gap in public finances, experts are predicting that Capital Gains Tax (CGT), Inheritance Tax (IHT), and other related taxes could see substantial increases. These changes are likely to affect high-net-worth individuals, property owners, and business owners.

What Are Capital Taxes and Why Are They Important?

Capital Taxes include taxes on the sale or transfer of assets such as stocks, property, and businesses. In the UK, the main capital taxes are Capital Gains Tax (CGT), Inheritance Tax (IHT), Stamp Duty Land Tax (SDLT), and Stamp Duty on share transactions. Unlike income taxes, which are levied on your earnings, capital taxes are applied to the gains you make from your investments or the value of assets you sell or pass on.

During the election campaign, the Labour Government committed to not increasing the four major taxes—Income Tax, National Insurance, VAT, and Corporation Tax. This commitment makes capital taxes an attractive target for generating additional revenue to fill the public finance gap.

For those holding significant assets, the upcoming Budget could introduce measures that increase your tax liabilities significantly.

Predicted Changes to Capital Taxes

Capital Gains Tax (CGT):
One of the most likely targets for increase is CGT. We could see the rate of CGT aligned with the higher rates of income tax, making it more costly to sell investments, properties, or businesses. Additionally, reliefs such as Business Asset Disposal Relief (formerly known as Entrepreneurs’ Relief) may be reduced or eliminated, increasing the tax burden on those selling their businesses.

Inheritance Tax (IHT):
Changes to IHT could involve tightening the reliefs available for business and agricultural assets, making it more challenging to pass on wealth without incurring significant tax liabilities. While IHT reforms are inherently complex, especially given the emotional and practical considerations around giving assets away, it’s crucial to be prepared for possible changes.

Stamp Duty on Shares:
There is also speculation that stamp duty on share transactions, for example, quoted share dealings in the City of London, could be increased. This would primarily impact investors and those involved in high-frequency trading or large-scale share transactions.

Who Will Be Most Affected?

The anticipated changes to Capital Taxes will primarily impact high-net-worth individuals, property owners with significant portfolios, and business owners considering selling their enterprises. If you hold stocks, investment properties, or are in the process of selling your business, it’s essential to be aware of these potential changes and take steps to mitigate their impact.

What Actions Should You Take?

With the likelihood of these changes coming into effect from Budget Day, rather than the next tax year, time is of the essence. If you’re planning to sell assets or transfer wealth, consider completing these transactions before October 30^th, 2024. You may also want to explore transferring business assets to family members or into trusts, although these strategies can be complex and require careful planning.

Act Now to Secure Your Financial Future

Given the uncertainty surrounding the upcoming Budget, we strongly recommend taking action now to review your financial plans. Our team is here to help you navigate these changes and ensure you’re well-prepared. If you have any questions or need personalised advice, please don’t hesitate to contact us.

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Contact us today to discuss your financial strategy and how to safeguard your assets against potential tax increases.