Tom Evennett, EY UK&I Family Enterprise Leader, comments on Capital Gains Tax
“As anticipated, Capital Gains Tax (CGT) was an area that came under review in today’s Statement. The CGT annual exempt amount, currently £12,300, has built up over time with inflation. The Chancellor announced a reduction in this to £6,000 for the 2023/4 tax year and a further fall to £3,000 from April 2024.
“Historically individuals with gains on share sales of (say) £20,000 may have been tempted to split the sales in two, each a day either side of 6 April to enable the total to be split over two separate years’ allowances. Now, the same people may query whether it’s worthwhile splitting those gains across seven years (at the £3,000 annual exempt amount) and instead trigger the full £20,000 and take the tax hit. This is what the Exchequer will be hoping for as they anticipate this cut to raise over £1.5bn in the next five years.”