The next Budget will be on 30th October, and it will be the first by the new Chancellor Rachel Reeves.
Whilst we don’t know exactly what will be announced, there has been speculation that CGT rates may increase. This isn’t due to anything Labour have said, more about what they haven’t..
So, this could be a good time to consider banking the current rate by making disposals from a trust. If you have a trust and have been considering selling/distributing assets out of it, now could be a good time to secure a lower tax rate. For example, bank the current rate to uplift the base cost for a beneficiary. You can also bank the CGT rate on assets into a trust.
There is no guarantee that rates will increase, but I have seen reports that they could go up to income tax levels of 40%, although this would be a massive rise. Will a rate hike hit all assets or be targeted to residential property? It is likely to be mainly for properties, but we probably won’t know for sure until the Budget details are leaked a week or so before 30th October.
Whether any planning is going to be beneficial for an individual/trustee is going to be down to specific circumstances. It won’t make sense to pay CGT just to bank the current rate for some people as holdover relief may be better. But it may not be…
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