The Autumn 2024 Tax Budget introduced notable adjustments to Capital Gains Tax (CGT) and Business Asset Disposal Relief (BADR), impacting investors and business owners alike.
Here’s what you need to know and how to plan for these changes:
What’s Changing with CGT?
- Higher Tax Rates: Effective immediately, the lower CGT rate increases from 10% to 18%, while the higher rate rises from 20% to 24%.
- BADR Adjustments: By April 2025, the tax rate under Business Asset Disposal Relief will increase to 14%.
What This Means for Business Owners and Investors
- Increased CGT on Business Sales
Selling business assets will now incur higher CGT rates. For example, if you sell an asset currently taxed at 10%, you’ll now pay 18%, substantially increasing the tax burden. Business owners planning to exit or sell should assess these changes carefully. - Planning Opportunities
These tax rate hikes emphasise the importance of strategic planning for asset disposal. Early tax consultations can help mitigate potential losses, explore exemptions, and optimise your financial strategy.
Action Steps: Preparing for CGT and BADR Changes
- Review Your Asset Portfolio
Evaluate potential disposals of business or personal assets under the new rates. Consider timing asset sales to minimise tax liabilities. - Consult a Tax Professional
Seek expert advice to understand how these changes affect your specific circumstances. A professional can help you explore relief options and manage your CGT exposure. - Explore BADR Options
For business owners, understanding the impact of the 14% BADR rate is crucial. A tax adviser can identify strategies to leverage relief effectively while minimising costs.
Broader Implications for the Economy
These CGT adjustments align with the government’s efforts to address fiscal deficits while maintaining public service funding. However, they also underscore the growing complexity of the UK tax landscape. For businesses and investors, staying informed and proactive is key to navigating these challenges successfully.
How We Can Help
At Nuvo, we specialise in helping entrepreneurs and investors like you manage tax changes effectively. Whether you need guidance on asset disposals, CGT planning, or navigating BADR, our expert team is here to support you. Contact us today to secure a financial plan tailored to your needs.
For further insights into the Autumn 2024 Budget, explore these resources:
- House of Lords Library Summary
- HM Treasury Official Budget Document (PDF)
- For a detailed breakdown, watch our short video on Business Asset Disposal Relief: What You Need to Know Before Selling
