Capital Gains & Inheritance Tax

Written by AJN Accountants
28 November 2022

Capital gains made by individuals are generally taxed at lower rates to income and taxpayers benefit from a separate annual exemption that covers the first £12,300 of gains made per year.

This exemption will be reduced to £6,000 for the tax year 2023-24 and then to £3,000 for 2024-25. Any annual exemption unused in a tax year cannot be carried over to the next year.

The lowering of the annual exemption will mean that many more individuals will have to report capital gains on a self assessment tax return.

When the gain arises from the disposal of a residential property in the UK it must be reported using the UK property service within 60 days of completion of the sale and the tax paid by the same deadline. This 60-day report is required in addition to the annual tax return.

The main rates of capital gains tax (CGT) remain at 10% for gains within the basic rate band and those subject to business asset disposal relief and 20% for other gains. However gains made from residential property are taxed at 18% within the basic rate band and 28% at higher rates.

The inheritance tax threshold (nil-rate band) has been fixed at £325,000 per person since 2009 and it will now be kept at that level until at least April 2028.

Where an individual leaves an interest in their main home to one or more children or other direct descendants they can also benefit from the residential nil-rate band worth a further £175,000 per person. That amount is also frozen until April 2028 although the value of residential properties has increased significantly since 2020-21 when it was introduced.

Why Accountancy and Tax Services Should Be Seen as a Strategic Investment – Not Just a Cost

In the world of business, every line on the profit and loss statement is scrutinised. It’s natural to question whether you’re getting value from each professional service you pay for. But when it comes to accountancy and tax advisory services, seeing them purely as a...

Childcare costs – don’t miss out!

Many working families will now be arranging childcare for the school summer holidays and the start and end of the school day from September. The Government's tax-free childcare scheme could provide up to £2,000 a year per child, or £4,000 if the child is disabled,...

Guidance for non-doms

With effect from 6.4.25 the preferential tax treatment enjoyed by UK resident individuals whose permanent home is outside the UK ('non-doms') has been withdrawn.  Before this date, non-doms could benefit from the remittance basis of taxation for up to fifteen years,...

Related Posts

Making Tax Digital for income tax – exemptions

Making Tax Digital for income tax – exemptions

In just over six months the first group of taxpayers will be required to join HMRC's Making Tax Digital for income tax (MTD IT) programme. Some individuals may be able to avoid this by claiming an exemption. Self-employed taxpayers and landlords with qualifying income...

Back to Basics: Life Insurance Policies and Tax Treatment

Back to Basics: Life Insurance Policies and Tax Treatment

Life insurance arranged by employers can provide vital financial protection for employees, their families, and the business itself, with important tax rules to consider. Employers often take out life insurance cover to protect against the financial impact of losing an...

We use contact information you provide to us to contact you about our relevant content, products, and services. You may unsubscribe from these communications at any time. For information, check out our Privacy Policy.