Earlier this month Chancellor Rishi Sunak commissioned The Office of Tax Simplification to investigate whether captial gains tax (CGT) is “fit for purpose”. The review will look at features such as allowances, exemptions and reliefs for individuals and small businesses. And because of the massive amount of government money that has been spent on trying to mitigate the economic effects of the coronavirus pandemic, some tax specialists believe the review will lead to rises in CGT.
"It is highly likely that there will be a tax increase either in the autumn Budget or shortly after," warns Julia Rosebloom, partner, private client tax services at Smith & Williamson. She also points out that CGT rates are at historic lows, with basic-rate taxpayers paying 10 per cent, and higher and additional-rate taxpayers paying 20 per cent on profits over the annual CGT allowance. Sales of properties that are not your main residence, meanwhile, attract tax of 18 per cent for basic-rate taxpayers and 28 per cent for higher and additional-rate taxpayers.