The Government will collect four times more cash from Capital Gains Tax (CGT) in 2023/24 than it did in 2013/14, according to predictions made after Wednesday’s Budget.
NFU Mutual analysis highlighted that receipts from CGT in 2013/14 totalled £3.9bn, but the Treasury has predicted this figure to soar to £15.7bn by 2023/24 – reaching £17bn a year later.
CGT already provides more cash to the Treasury than tobacco duty, according to NFU Mutual, which added it would also soon outstrip alcohol duties.
Chartered financial planner, Sean McCann, suggested CGT can catch many people “unaware” and that those selling or giving away assets often end up paying “more than they need to.”
He commented: “While much of the projected increase will be down to the slashing of Entrepreneurs’ Relief, there are other contributing factors. The changes to the tax treatment of mortgage interest on buy-to-let properties has led many to sell up triggering capital gains tax bills.
“Similarly, many long-term investors in the stock market have benefited from large gains, but the recent downturn may have encouraged them to sell exposing gains to tax. Simple steps such as sharing ownership of assets between spouses or civil partners before they are sold or staggering sales across tax years can help reduce capital gains tax bills.
“Those giving away business assets or making gifts to trusts may also be able to defer CGT. The key is to take advice before selling or making gifts.”
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