Beat the Capital Gains annual exemption reduction from 6 April 2023

Each year, individuals are entitled to a capital gains annual exemption.

For the current tax year, the annual exemption is £12,300; however from 6 April 2023 this will more than halve to just £6,000.

This will then halve again from 6 April 2024 when it will reduce to just £3,000!

Any gains made in excess of the annual exemption will be charged to capital gains tax. For disposals of assets excluding residential property, capital gains tax is charged at 10% for gains falling into the basic rate band and 20% on any gains falling into the higher rate band. 

For disposals of residential properties, these rates increase to 18% and 28% respectively. 

Unfortunately, unused annual allowances can’t be carried forward to the following tax year; therefore, if you don’t use them, you’ll lose them. 

With the end of the tax year fast approaching, you may want to consider utilising your annual exemption of £12,300 for the current tax year. 

If you have any questions regarding this, please do not hesitate to get in touch with me.