CGT Rates Increase for Investors and Business Owners: What You Need to Know

The headline rate of CGT rises from today for both basic and higher-rate taxpayers, with reliefs for business owners to be reduced. Capital gains tax on shares has increased from 10% to 18% for basic rate taxpayers and from 20% to 24% for higher-rate taxpayers. However, rates on residential property remain the same at 18% and 24%. Changes to business asset disposal relief (BADR) and investors’ relief have also been announced, with the lifetime limit for investors’ relief reduced from £10mn to £1mn. The CGT rate on assets qualifying for these reliefs will also rise to 14% in April 2025 and 18% from 2026-27. The government aims to raise £2.5bn by 2029-30 with these measures, but concerns have been raised about the potential negative impact on investment and economic activity. Investors are advised to make full use of tax wrappers such as Isas and pensions to mitigate their CGT liability.