Tax free allowances on capital gains have been slashed, resulting in increasing CGT liabilities.
With effect from 6 April 2023 the CGT annual exempt amount will fall from its present level of £12,300 to £6,000 for 2023/24 and further to £3,000 with effect from 6 April 2024.
By way of an example, a client selling chargeable assets with gains of £20,000 could hitherto have realised gains of £10,000 each on either side of 6 April and avoided CGT altogether, but if such a strategy is adopted now, £4,000 of the gain realised in 2023/24 will be subject to CGT in 2023/24. In order to avoid CGT altogether, the client would now need to split the sale into 3 parts – £12,300 in 2022/23, £6,000 in 2023/24 and £1,700 in 2024/25.
Clients would be well advised to make full use of their ISA allowances to shelter chargeable assets from CGT.
Please contact us for further advice. You can contact us via welcome@pkgroup.co.uk or +44 (0)20 8334 9953
