Autumn Budget Report

CAPITAL TAXES

Capital Gains Tax Capital Gains Tax rates

Business Asset Disposal Relief and Investors’ Relief The rate applying for individuals claiming Business Asset Disposal Relief and Investors’ Relief will increase from 10% to 14% for disposals made on or after 6 April 2025. The rate will increase again to 18% for disposals made on or after 6 April 2026. In addition, the lifetime limit for Investors’ Relief will be reduced from £10 million to £1 million for qualifying disposals made on or after 30 October 2024. This limit takes into account any prior qualifying gains where the relief was claimed. Carried interest rates and reform The rates that apply to carried interest of 18% and 28% will increase to a flat rate of 32%. This will apply to carried interest arising to an individual on or after 6 April 2025. From April 2026, all carried interest will be taxed within the income tax framework. A multiplier of 72.5% will be applied to any qualifying interest brought within the charge. Capital Gains Tax on liquidation of a Limited Liability Partnership Where a member of a Limited Liability Partnership (LLP) has contributed assets to the LLP, chargeable gains that accrue up to the contribution will be charged to tax when the LLP is liquidated and the assets are

The Capital Gains Tax rates will increase for disposals, other than of residential property and carried interest, made on or after 30 October 2024. The basic rate of 10% will increase to 18% and the 20% rate will increase to 24%. No changes will be made to the rates applying to the disposal of residential properties of 18% and 24%. The rate applying to trustees and personal representatives will increase from 20% to 24% from the same date. Comment The changes in the main rates of Capital Gains Tax brings them in line with those paid on disposal of residential property. This means that there will be no need going forward to differentiate between the types of property being disposed of.

Capital Gains Tax annual exemption The annual exempt amount will remain at £3,000 for 2025/26.

Capital Taxes

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