According to research undertaken by private equity firm Growthdeck and published by Croner-I, Capital gains tax (CGT) bills have increased 27% on last year, with over £15bn of CGT paid in the year to 31/10/22.
A number of factors have driven the CGT increase, including:
- Rise in taxes on business sales:
a. The lifetime allowance on business asset disposal relief, also known as entrepreneurs’ relief was reduced to £1m in 2020. Previously set at £10m, selling off business assets will now potentially incur a much higher tax bill.
- Many buy-to-let investors sold property towards the end of the pandemic when property prices were high, thereby inflating the Capital Gains Tax bill further.
How to reduce your CGT bill
There are many ways in which you could potentially reduce your Capital Gains Tax liability legally. Investment schemes such as Enterprise Investment Scheme (EIS) and SEIS, and using a spouse’s Capital Gains Tax allowance. It’s worth also knowing that the CGT allowances are set to drop from 2023.
Tax is complicated, so it’s worth having a chat with our tax specialists to see how you could save tax. Our tax specialists have spent many years training, and update their knowledge constantly so you can rely on intelligent advice. Get in touch today and let’s reduce your tax bill.