Capital Gains Tax

CGT adjustment for 2024/25

The capital gains tax rates were increased with effect from 30 October 2024. From that date, the rate payable on gains other than those on residential property and carried interest, was increased from 10% to 18% where income and gains fall within the basic rate band, and from 20% to 24% once the basic rate band has been used up. There were no changes to the rates for residential property, which remained at 18% to the extent income and gains, are within the basic rate band and 24% otherwise for the full tax year.

HMRC’s Self Assessment online return software calculation for 2024/25 does not take account of the in-year rate increase, and works out the liability for the year as if the 10%/20% rates applying from 6 April 2024 to 29 October 2024 applied for the whole tax year. This means that if you realised a chargeable gain in 2024/25 on or after 30 October 2024 and your chargeable gains for the year were more than the annual exempt amount of £3,000, your liability will need to be adjusted to make sure that you pay the correct amount of capital gains tax for 2024/25.

We can help you determine whether an adjustment is needed and calculate the amount of that adjustment.

Business asset disposal relief

Business asset disposal relief (BADR) reduces the rate of capital gains tax on qualifying disposals up to the £1 million lifetime limit,

The rate of capital gains tax payable where BADR applies increased from 10% to 14% with effect from 6 April 2025. It is to increase again, to 18%, from 6 April 2026.

If you are planning on disposing of your business or business assets in the immediate future, ensuing that the disposal goes ahead before 6 April 2026 will enable you to access the 14% capital gains tax rate.

If you ceased a furnished holiday lettings (FHLs)business before 6 April 2025 and the property is sold within three years of the date of cessation, BADR can still be claimed. Making the disposal before 6 April 2026 will ensure that any gains are taxed at 14% rather than at 18%.

We can check that the qualifying conditions for the relief have been met and advise of the optimal disposal date to secure the most favourable tax rate.