The Autumn Budget – CGT rise is less than feared

Before the announcement of the Autumn Budget, there had been much speculation about an increase in Capital Gains Tax – with some less optimistic predictions suggesting a raise to 40% or even 45%.  

However, the Government clearly understands the important role business owners play in the UK economy. This has been seen in a slight rise in the higher CGT rate from 20% to 24%, and the basic rate from 10% to 14%.  

Speaking in the House of Commons, Rachel Reeves, the Chancellor of the Exchequer, said: “We need to drive growth, promote entrepreneurship and support wealth creation, while raising the revenue required to fund our public services and restore our public finances.”  

Reeves was quick to add that despite the rise: “The UK will still have the lowest Capital Gains Tax rate of any European G7 economy.” 

In addition, Business Asset Disposal Relief will remain at 10% until April 2025, when it will increase to 14%, and 18% in 2026-27. 

The lifetime allowance will remain at £1million and this relief will only be available to business owners who have owned their company for two years. This is to reward entrepreneurs who have invested in their business.