Capital Gains Tax | Edward Harris Chartered Certified Accountants
Capital gains tax rates have increased in 2026, affecting how UK business owners report profits from asset sales.
This article covers the latest changes, exemptions, and strategies to help you navigate these updates confidently and efficiently.
Understanding the New CGT Rates for 2026
Basic rate capital gains tax increased from 10% to 18% effective from October 2024.
Higher rate rose from 20% to 24% in the same period.
These changes apply to disposals of chargeable assets like shares and property.
Business owners must update their tax planning to reflect these higher liabilities.
Tax-Free Exemptions and Allowances
The capital gains tax annual exemption remains at £3,000 from April 2026.
Dividend allowance stays at £500, providing relief for investors.
Income tax and national insurance thresholds are frozen until 2031.
Utilising these allowances can reduce overall tax bills for business owners.
Advanced Tax Planning: Carried Interest Changes
Carried interest will be taxed as income instead of capital gains from April 2026.
Transitional CGT rates apply, affecting investment fund managers and similar professionals.
This shift requires adjustments in financial strategies for asset disposals.
Proper planning can help mitigate the impact of these regulatory changes.
Avoiding Common CGT Compliance Errors
Low-income taxpayers often face challenges with rate alignment for disposals in 2025/26.
Errors in reporting can lead to penalties and increased scrutiny from HMRC.
Accurate calculation and timely filing are crucial to avoid compliance issues.
Seeking professional advice can help navigate these complexities effectively.
Evaluating the Fairness of Current CGT Policies
Current capital gains tax rates of 18% and 24% simplify calculations compared to income tax.
This addresses fairness issues by providing clearer guidelines for taxpayers.
The policies aim to balance revenue generation with administrative efficiency.
Understanding these aspects can help business owners make informed financial decisions.
Ready to Optimise Your Capital Gains Tax Strategy?
Navigating capital gains tax changes can be complex for UK business owners.
Our team at Edward Harris offers tailored advice to help you manage liabilities and plan effectively.
Book a free consultation to discuss your specific needs and gain financial clarity.
