Capital gains tax (CGT) annual exempt amount
The CGT annual exempt amount for individuals and personal representatives will be cut to £6,000 for 2023/24. The annual exempt amount for most trusts will likewise fall to £3,000 (minimum £600), as previously announced. For 2024/25 onwards, the corresponding figures will be £3,000 and £1,500 (minimum £300). The allowance will no longer be index linked.
Don’t waste your CGT annual allowance. The annual exempt amount for personal capital gains will be reduced from £12,300 to £6,000 for 2023/24 and cut down to just £3,000 from 2024/25. You should consider realising gains now and reinvesting the proceeds in ISAs or pensions, which are free of CGT.
CGT – separation and divorce
As previously announced, for disposals from 6 April 2023:
- Separating spouses or civil partners have up to three years after the year they cease living together in which to make no gain/no loss transfers.
- No gain/no loss treatment also applies to assets that separating spouses or civil partners transfer between themselves as part of a formal divorce agreement.
- A spouse or civil partner who retains an interest in the former matrimonial home has the option to claim private residence relief (PRR) when the property is sold.
- Some individuals who have transferred their interest in the former matrimonial home to their ex-spouse or civil partner are entitled to receive a percentage of the proceeds when that home is eventually sold. They can then apply the same tax treatment to those proceeds, when they are received, that applied when they transferred their original interest in the home to their ex-spouse or civil partner.
Carried interest rules
UK-resident investment managers can use a new elective accruals basis from 6 April 2022 for carried interest to accelerate their tax liabilities, in order to align their timing with the position in other jurisdictions where they may obtain double taxation relief.
Inheritance tax (IHT)
The IHT nil rate band will remain at £325,000 from 2023/24 to 2027/28, as previously announced. The residence nil rate band (RNRB) likewise stays at £175,000 and the RNRB taper continues to apply until April 2028 if the value of a deceased person’s estate is greater than £2 million.
Stamp duty land tax (SDLT)
There are no changes to SDLT rates.
You can also read our our highlights of Spring Budget 2023 Summary
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