Higher taxes on profits from selling assets like shares.
As part of a broader tax-raising initiative, the Chancellor, Rachel Reeves, confirmed that the lower Capital Gains Tax (CGT) rate will rise from 10% to 18%, while the higher rate will increase from 20% to 24%. This change means you might face higher taxes on profits from selling assets like shares. Previously, those with gains above the threshold had to pay 20% on profits from assets such as shares, or 24% from selling additional property. Rates on residential property will remain at 18% and 24%, respectively.
‘We need to drive growth, promote entrepreneurship and support wealth creation, while raising the revenue required to fund our public services and restore our public finances,’ Reeves said. ‘This means the UK will still have the lowest capital gains tax rate of any European G7 economy.’ CGT is paid on profits of more than £3,000 (2024/25) made when an asset is sold, and rates depend on how much you usually pay in Income Tax, and how large the gain is.
The 18% and 28% CGT rates currently applied to carried interest gains remain unchanged for the current tax year. This charge applies to individuals who provide investment management services to funds and receive carried interest on which they are liable to pay CGT. However, the Chancellor announced that these CGT rates will increase to a single, unified rate of 32% starting on 6 April 2025. She said that the fund management industry provided ‘a vital contribution to our economy but… there needs to be a fairer approach to the way carried interest is taxed.’ Additionally, from April 2026, carried interest will be subject to a broader set of policy changes, with further details to be announced. The Chancellor added that to encourage entrepreneurs to invest in their businesses, the lifetime limit for Business Asset Disposal Relief would be kept at £1 million and would remain at 10% this year, rising to 14% in April 2025 and 18% in 2026/27.
‘The OBR say these measures will raise 2.5 billion pounds by the end of the forecast,’ the Chancellor said. CGT raised 15 billion pounds in the last financial year, and is currently worth around 4% of receipts from all taxes on income. CGT is not normally payable when a person sells their primary residence but is payable on the sale of second properties.
IS IT TIME TO ACT NOW TO SAFEGUARD YOUR INVESTMENTS AND WEALTH?
Prepare for the upcoming changes in Capital Gains Tax rates announced by Chancellor Rachel Reeves, which could significantly impact your finances. Don’t navigate these complexities alone—consult us to optimise your tax strategy. Take control of your financial future by planning proactively to manage increased potential tax liabilities effectively. Act now to safeguard your investments and wealth.
If you have any questions or wish to explore your options, reach out to us. Our team of experts is ready to assist you. please don’t hesitate to contact us on 0333 241 3350 or email info@richmondhousewm.co.uk
The information available through Richmond House Wealth Management is for your general information. In particular, the information does not constitute any form of advice or recommendation and is not intended to be relied upon by users in making (or refraining from making) any investment decisions. Appropriate independent advice should be taken before making any such decision. Past performance is not necessarily a guide to future performance. The value of investments may go down as well as up and you may not get back the money you originally invested.
Richmond House Wealth Management is a trading name of IWP Financial Planning Ltd which is authorised and regulated by the Financial Conduct Authority. FCA Reference 441359. Registered in the UK at Blythe Lea Barn, Mill Farm, Packington Park, Meriden, Coventry, West Midlands, CV7 7HE. Company Number 04138186.