- Consider taking gains this year before the capital gains tax allowance is slashed
- Make the most of your Isa allowance
- You can also transfer assets to your spouse and look at investments offering tax incentives
Starting from the next tax year, investors are in for a pretty sizable increase to capital gains tax (CGT). In last week’s Autumn Statement, amid a flurry of tax hikes, chancellor Jeremy Hunt announced that the CGT allowance will be reduced from the current £12,300 to £6,000 from April 2023, then cut again to £3,000 from April 2024. A higher or additional-rate taxpayer that makes a £12,000 taxable gain will owe no CGT this year, but will have to pay £1,200 in 2023-24 and £1,800 from April 2024.
CGT rates will remain unchanged. For assets other than residential property, higher and additional-rate taxpayers pay 20 per cent on taxable gains, while basic taxpayers pay 10 per cent as long as the sum of the capital gains outside the allowance and their taxable income stays within the basic income tax band (they are taxed 20 per cent on anything over that).