Effectiveness of Labour's immediate CGT hike under question

CGT rates were raised in last Wednesday’s Budget

Jen Frost
clock • 2 min read

The government’s move to hike capital gains tax (CGT) rates in last Wednesday’s Budget (30 October) may have been more effective had it waited to bring in changes from the next tax year rather than immediately, a tax expert has said.

The main rates of CGT for non-residential property disposals were hiked from 10% and 20% to 18% and 24% respectively, effective last Wednesday. The government is expected to raise £90m this tax year thanks to CGT changes, according to an impact summary published in a Budget policy paper. This is expected to rise to £1.44bn in 2025/26 and generate an additional £2.49bn by 2029/30. However, FSL tax reporting analyst Alex Ranahan told PA that the immediate change could backfire to some extent, while a longer grace period up to April 2025 may have the potential to encourage transactions a...

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