LONDON - September 8, 2020 - (Newswire.com)
As UK debt has risen above £2 trillion, Chancellor Rishi Sunak is being advised by the Treasury to raise the top rate of UK capital gains tax to 40%, reports Bambridge Accountants.
The Chancellor is expected to deliver his next budget this autumn - normally held in October or November, but a second wave may push it back.
Current UK capital gains rates:
- Basic rate taxpayers (total income up to £50,000) is 10% for gains (but 18% on residential property).
- Higher rate taxpayers (income above £50,000) is 20% for gains (28% on residential property).
Under the proposed changes, capital gains tax rates would be raised to match income tax rates.
Capital gains tax (CGT) on asset sales would double from 10% to 20% for basic rate taxpayers, and from 18% to 20% for gains on property sales.
For higher rate and additional rate taxpayers, CGT could double from 20% to 40% on asset sales and 28% to 40% on property sales.
In addition, the Treasury has also held discussions over scrapping the various reliefs applied to CGT.
Those tax reliefs include:
- Capital Gains tax-free allowance of £12,300 per person, per year (the CGT allowance is in addition to the UK personal income tax allowance)
- Business Asset Disposal Relief (Entrepreneurs' Relief) - CGT is reduced to 10% for shareholders selling shares (when you own at least 5% of the business) and to business owners selling business assets, capped at a lifetime allowance of £1 million
- Individual Savings Accounts (ISAs) - any capital gains on shares or funds held in an ISA are free from UK CGT
- Pension tax relief - investment growth of the assets held within registered pension schemes is exempt from income and capital gains tax
Other potential tax increases being considered are:
- Reducing pensions tax relief - potentially capped to 20 per cent so higher taxpayers will lose half the tax relief
- Increase in petrol and other duties
- A tax on online shopping
- Reviewing inheritance tax, with a view that additional taxes can be claimed
Contact Alistair Bambridge, alistair@bambridgeaccountants.com, +44 (0)20 3797 1432.
Bambridge Accountants has offices in London and New York, specializing in taxes for U.S. expats worldwide. Providing an accounts and tax service tailored for Americans overseas, FATCA reporting and offering clear, transparent fixed fees.
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Original Source: Chancellor Eyes Raising UK Capital Gains Tax to 40%, Reports Bambridge Accountants
