Budget announcements 

At the Budget, the government announced the following in relation to CGT rates:  

• with effect from 30 October 2024, the lower rate of CGT will be increased from 10% to 18% and the higher rate from 20% to 24%;
• the 10% rate of CGT on gains attracting business asset disposal relief (BADR) or investors’ relief, will be increased to 14% from 6 April 2025 and to 18% from 6 April 2026; and
• carried interest gains, which are currently taxed at 18% at the lower rate and 28% at the higher rate, will be taxed at a flat rate of 32% from 6 April 2025. (This is considered in more detail in a separate article.)    

The CGT annual exemption had already been reduced to £3,000 for individuals from 6 April 2024 (£1,500 for trustees) and that will continue until at least 5 April 2026.  

The lifetime limit for investors’ relief, has been reduced from £10m to £1m with effect from 30 October 2024.  An anti-avoidance measure prevents elections being made to disapply the company share reorganisation provisions, in order to trigger a chargeable gain, where the reorganisation took place before 30 October 2024. 

CGT and SDLT: residential property 

The lower and higher rates of CGT applying to gains on residential property are unchanged at 18% and 24% respectively.  

Some changes to the rates of stamp duty land tax (SDLT) were announced. With effect from 31 October 2024: 

• the supplement for purchases of second or additional homes by individuals is increased from 3% to 5%; and
• for companies and ‘non-natural persons’ buying UK residential property worth over £500,000, the rate of SDLT is increased from 15% to 17%. 

The withdrawal of the temporary residential rates of SDLT – introduced by the previous government in 2022 – will go ahead as planned on 31 March 2025. For transactions with an effective date on or after 1 April 2025:  

• the residential nil rate band will revert to £125,000; 
• the first-time buyers’ relief nil rate band will revert to £300,000; and
• the maximum transaction value for first-time buyers’ relief will revert to £500,000. 

ICAEW’s view 

Responding to the changes to CGT rates announced at the Budget, Frank Haskew, Head of Taxation Strategy at ICAEW said: “Ahead of the Budget, ICAEW had asked the government to ensure that capital taxes support long-term business investment. For CGT, we flagged that the inflationary effect of long-term investment needs to be factored into the setting of the CGT rate to ensure that there is no disincentive to investing.  

“Although the rise in CGT rates will be unwelcome news for investors, the fact that CGT rates remain lower than income tax rates does go some way to recognising that inflation erodes investment gains.”  

ICAEW’s Budget webinar 

To learn more about the measures discussed above, and other changes announced at the Budget, join members of the Tax Faculty at the Budget webinar on Friday, 1 November 2024. Attending the webinar could contribute up to 1.5 hours of verifiable Continuing Professional Development (CPD), providing you can demonstrate that the content is relevant to your role. 

Further information 

• Policy paper: Changes to the rates of CGT
• Policy paper: SDLT - increase to the higher rates on additional dwellings and to the single rate of tax on purchases by non-natural persons