The October 2024 Autumn Budget delivered one of the most significant Capital Gains Tax (CGT) overhauls in recent memory. Rate increases took effect immediately — from 30 October 2024 — catching many taxpayers off guard. Here is a clear breakdown of what changed and what it means in practice.
The New CGT Rates
For disposals on or after 30 October 2024, the main CGT rates on most assets (shares, business interests, and most other property) are:
| Taxpayer band | Rate before 30 Oct 2024 | Rate from 30 Oct 2024 |
|---|---|---|
| Basic rate taxpayer | 10% | 18% |
| Higher / additional rate taxpayer | 20% | 24% |
Residential property rates, previously higher than other assets (18%/28%), have been aligned with the new main rates of 18%/24%. The principal private residence exemption on your main home remains fully intact.
Business Asset Disposal Relief (BADR)
Business Asset Disposal Relief — formerly Entrepreneurs' Relief — allows qualifying business owners to benefit from a reduced CGT rate when selling their business or shares. The rate is increasing in two stages:
- From 6 April 2025: rate rises from 10% to 14%
- From 6 April 2026: rate rises further to 18%
The lifetime limit remains at £1 million. Business owners planning to exit in the next two years should seek advice promptly — the window for the more favourable 14% rate closes in April 2026.
The Annual Exempt Amount
The CGT annual exempt amount — the amount of gains you can realise each year free of tax — has been drastically reduced in recent years:
- 2022/23: £12,300
- 2023/24: £6,000
- 2024/25 onwards: £3,000
The practical effect is that gains which were previously sheltered are now fully taxable. For investors with portfolios or assets they rotate regularly, this makes careful annual planning far more important.
What Should You Do?
- Use your annual exempt amount each year — at £3,000, it is modest, but allowing it to go unused is a wasted opportunity.
- Use your spouse or civil partner's exemption — transfers between spouses are exempt from CGT. Jointly held assets can effectively double the annual exempt amount available.
- Consider ISAs for future investment growth — gains within a Stocks and Shares ISA are completely free of CGT.
- Business owners: review your exit timeline — if you are planning to sell, the current 14% BADR rate applies only until 5 April 2026. Acting before then could save a meaningful amount.
- Investors' Relief — the lifetime limit has been reduced to £1 million (matching BADR). Check whether any previously accumulated relief entitlements are affected.
Planning a business sale or significant asset disposal?
The right timing and structure can make a significant difference to your CGT liability. Speak to our team before you proceed.