Individuals rush to sell assets as capital gains tax bill rockets to £10.1bn
The UK’s capital gains tax (CGT) bill has hit £10.1bn, up more than fourfold from £2.5bn a decade earlier, prompting people to sell their assets.
Despite the increase of nearly £7.5bn in a decade, more CGT could be demanded from the taxpayer.
The Office for Tax Simplification recently recommended the Chancellor increase CGT rates in line with rates of income tax, as well as making inherited assets subject to both CGT and inheritance tax.
Potential changes ahead to CGT have led more individuals to sell assets that might attract even bigger CGT bills in the future, such as buy to let properties, according to financial adviser Salisbury House Wealth.
It has also been reported entrepreneurs have accelerated sales of businesses in recent weeks in order to avoid any increase in CGT.
Tim Holmes, managing director at Salisbury House Wealth, said: “It’s understandable that people are worried about CGT rates rising but if they rush, it could cost them much more than necessary in tax.
“There are many other options that might make more financial sense than just selling and paying the tax this year. ‘Rolling over’ gains into an EIS investment and making sure you buy an asset inside a pension wrapper are both quite simple steps that may work well for some.
“It’s also vital to make sure you use as much of your tax-free allowance on capital gains as possible – spread sales over multiple years if you can.”
Londoners pay nearly 30 per cent of the UK’s capital gains tax, with taxpayers in Kensington and Chelsea forking out the most.