Jeremy Hunt accused of sleight of hand over tax

Whilst he announced uprating of the Local Housing Allowance (LHA) to the relief of many, the Capital Gains Tax (CGT) allowance was more than halved in the new tax year to £6,000, however from next year it will be reduced again by £3,000.

Samuel Gee at Manning Gee Investments said: “What the Chancellor gives with one hand, he has already taken away in another.

“The Capital Gains Tax (CGT) allowances have taken a nosedive from a decent £12,300 before April 2023 to a measly £3,000 starting April 2024. And there’s no surprise that all was quiet on this in the Autumn Statement.”

Currently, CGT is payable on profits earned when people sell or gift certain items worth more than £6,000 such as antiques or art, or assets including second homes and shares held outside of an ISA or PEP.

Mr Gee continued: “While CGT has often been considered a tax on the rich, it is not difficult for everyday investors with modest portfolios to be caught, possibly quite unexpectedly in the CGT trap.

“From a small landlord needing to sell a property that has supplemented their income, to a non-ISA investor with a modest portfolio as low as £60,000, CGT can now sneak up unexpectedly, increasing tax receipts for the government and creating a costly headache for those who never expected CGT to apply to them.

“This isn’t too surprising when the allowance will have been reduced by over 75% by April 2024. There’s just time to make sure you are invested as effectively as possible before the last hit takes place.

“Holding your investments in the right tax-wrappers can make a significant difference to the CGT position so while there’s still time, investors should consider how best they can mitigate any unexpected bills – as HMRC will know if it’s due!”

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