BUDGET 2016 – Changes to Capital Gains Tax Rates

A surprise announcement in the Budget was the reduction in capital gains tax rates.

This measure reduces the 18% rate of CGT to 10% and the 28% rate of CGT to 20% for chargeable gains, except in relation to gains on the sale of residential property that does not qualify for private residence relief. In effect, the reduction will not apply to second residential properties.

This will have effect for capital gains on or after 6 April 2016 and will benefit individuals, trusts and personal representatives who pay Capital Gains Tax.

Within an hour of the announcement I was exchanging e-mails with a client. The sale of premises schedule for this Friday has now been deferred until 6 April 2016.

The rationale for this announcement is to incentivise individuals to invest in companies as opposed to residential property.

If you want to discuss this in further detail please contact Brian King on 024 7622 1046 or e-mail [email protected]