Chancellor requests review of Capital Gains Tax
The Chancellor, Rishi Sunak, has written to the Office of Tax Simplification (OTS) this summer requesting a review of Capital Gains Tax (CGT). The OTS review will consider all aspects of CGT, in relation to individuals and smaller businesses.
The OTS will provide recommendations to the chancellor, and their review will investigate, among other aspects:
- opportunities to simplify administration; and
- areas where the present rules can distort behaviour or do not meet their policy intent.
This has naturally caused some speculation that tax rates on capital gains could increase. The current tax rates on capital gains range from 10% to 28% depending on the asset disposed of, and the individual's tax status. CGT doesn't apply to assets held in certain tax wrappers, such as an ISA or a pension.
The OTS has launched a survey for stakeholders to share their experiences of dealing with CGT. It is difficult to predict the conclusions of the review or the eventual action the government could take. This may be of particular concern for individuals planning to make a withdrawal from their investment portfolio.
Castlefield are continuing to monitor this situation, across both investment management and financial advice. If you'd like to discuss this topic and how this may affect your personal finances, we recommend you contact your usual adviser at Castlefield if you are an existing client, or via https://www.castlefield.com/contact-us/
Written by Matt Ralph
Please note that this communication does not constitute taxation advice. Should you require taxation advice please speak to a taxation specialist or accountant. Any personal advice in respect of taxation is not regulated by the Financial Conduct Authority. Further information about taxation rates, allowances and protections are available at https://www.gov.uk/.
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