Capital Gains Tax (CGT), the levy on profits from the sale of assets such as second homes, is undergoing changes. The Spring Budget revealed reduced rates for second homes and rental properties starting in April 2024.
The higher rate of CGT has been reduced from 28% to 24% and the lower rate of CGT has been maintained at 18%. It’s worth noting that CGT is not payable on your main home, only on second/holiday homes.
The threshold for CGT is shrinking too. Slashed from £12,300 to £6,000 in April 2023, it has now fallen to £3,000.
Your CGT liability hinges on the assets sold and your Income Tax bracket when profit is factored into your taxable income.
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.