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Accountancy Services - 07-10-2024 - - 0 comments
Upcoming Likely Changes to Capital Gains Tax (CGT): What You Need to Know and Do Now

As tax policies evolve, staying informed about upcoming changes to Capital Gains Tax (CGT) is crucial for effective financial planning. At Kings Oak Accountancy, we aim to provide you with the insights and strategies needed to navigate these changes successfully. Here's a look at the anticipated changes to CGT and steps you can take now to prepare.

Anticipated Changes to Capital Gains Tax

1. Reduction in CGT Allowance: The annual CGT allowance may be reduced, meaning you could pay more tax on your gains. This could significantly impact your tax liabilities if you frequently realise gains on investments or property sales.

2. Increased Rates: There are discussions about aligning CGT rates more closely with income tax rates. This means higher earners could see a substantial increase in their CGT bills.

3. Changes to Reliefs and Exemptions: Certain reliefs, such as Business Asset Disposal Relief (formerly Entrepreneurs' Relief), might face further restrictions or changes, impacting small business owners and investors.

4. Reporting Requirements: There could be stricter and more immediate reporting requirements for CGT, necessitating more timely and accurate record-keeping. 

What to Do Now

1. Review Your Assets and Investments: Take stock of your current investments and consider whether it might be beneficial to realise any gains before the changes take effect. This could help you take advantage of the current allowances and rates.

2. Utilise Available Reliefs: Make sure you are fully utilising available reliefs and exemptions, such as the current CGT allowance, before any potential reductions.

3. Plan for the Long Term: Consider the impact of higher CGT rates on your long-term investment strategy. This may involve diversifying your portfolio or exploring tax-efficient investment vehicles.

4. Keep Detailed Records: Accurate record-keeping is essential for compliance with any new reporting requirements. Ensure you have detailed records of your asset purchases, sales, and associated costs.

5. Consult with a Professional: Changes in tax law can be complex and have significant implications. Consulting with a tax professional can provide personalised advice tailored to your specific situation and help you make informed decisions.

At Kings Oak Accountancy, we are committed to helping our clients navigate these changes with confidence. If you have any questions or need assistance with your tax planning, please don't hesitate to contact us. Staying proactive and informed is the key to managing your financial health effectively in the face of these upcoming changes. Whilst writing this today, it is one month before the UK budget on 30th October 2024 and now is the time to review your position.

 

 

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