Budget 2016 – Capital Gains Tax changes

In a surprise announcement, the Chancellor has announced that effective from 6 April 2016, the Capital Gains Tax (CGT) rates for standard rate taxpayers is to be cut to 10% (from 18%) and for higher rate taxpayers to 20% (from 28%).

The new rates will not apply to the sale of residential property that does not qualify for private residence relief. Any CGT applicable on the sale of residential property and carried interest (the share of profits or gains that is paid to asset managers) will have an 8% surcharge effectively being taxed at the old CGT rates.

The Chancellor also announced that entrepreneurs’ relief will be extended to external investors in unlisted trading companies. The new relief will apply a 10% CGT rate on long term external investment in unlisted companies, up to a separate maximum of £10 million of lifetime gains. The investors’ relief will apply to disposals of qualifying shares held for a period of at least three years starting from 6 April 2016 that were acquired on or after 17 March 2016.

Source: HM Revenue & Customs | 17-03-2016

You should always take specific advice in relation to your own circumstances as this article can only provide a guide.