Capital Gains Tax update by
The areas that will impact most savers are the changes to the tax-free allowances for capital gains tax and dividends tax.
The current tax-free allowance for capital gains tax (CGT) is £12,300. Capital gains is defined as the capital growth that the investor witnesses on their initial investment. This means the first £12,300 of growth is currently not taxable. However, from April 2023 this threshold will be reduced to £6,000.
This may apply to an investor holding assets within a General Investment Account where a tax liability is created as assets are bought and sold or if withdrawals are made.
It is imperative that ISA allowances are maximised to legitimately avoid CGT but there are other tax efficient investment vehicles to be considered within a portfolio.
Many of these changes are complex and require a professional financial adviser to calculate and plan the best possible course of action. If you think these changes may impact you, contact us and we will plan your future strategy.