Just how will Government fund the £350 billion deficit as a result of the emergency coronavirus spending?
Anyone with an ounce of common sense will realise that there will be tax changes in the months and years ahead. UK Chancellor Rishi Sunak has already commissioned a review of the UK’s Capital Gains Tax (CGT) system. The Office of Tax Simplification will complete the review which will include a survey to ask for views about capital gains tax..
There are several ways that you could pay more capital gains tax:
an increase in the tax rate you pay if you are a higher tax rate payer – 28% on gains from residential property, 20% on your gains from other chargeable assets
a reduction in the tax free allowance of £12,300 (£6,150 for Trusts) or the level at which capital gains tax is paid on personal possessions (currently £6,000 or more except for your car)
an increase what is in scope for when you pay capital gains tax beyond personal possessions, property that’s not your main home, your main home, shares that aren’t in an ISA or a PEP or business assets
the removal of exemptions for CGT such as anyone who sells their main home
The Government claim that the review is to identify ‘simplification opportunities’. The Office of Tax Simplification (OTS) is have already published an online survey with high level comments requested by 10 August and more detailed comments by 12 October.
The team at Klarity Tax will be responding to the survey as we are always supportive of simplifying UK personal taxation as this can only lead to better outcomes for our customers.
Ultimately any changes will be a matter for Government and Parliament. One thing is for sure that alongside any simplification changes government will surely look at opportunities to collect more from UK personal tax payers to fund the Covid-19 bill.
If you are concerned about any exposures you could have to capital gains tax please don’t hesitate to contact Klarity tax who are actively monitoring the situation and can provide advice on what steps to take to mitigate future changes.