The themes of the Chancellor’s Autumn Statement on 17 November were stability, growth and public services. Sticking to the manifesto promise of no changes to income tax rates, despite press speculation, there were no changes to other headline rates, including capital gains tax (CGT) rates.
However, most individuals will feel the impact of ‘fiscal drag’. Accentuated by inflation, now further extended by the Autumn Statement, the freezing of the personal allowance and income tax thresholds to 2028 will bring more taxpayers within the 20 percent basic rate and 40 percent higher rate bands. Lowering the additional rate band from £150,000 to £125,140 will also bring more people into the 45 percent band, and it is always those at the margin of thresholds that are hit the hardest. Other announcements include a reduction in the dividend allowance from £2,000 to £1,000 from April 2023 and to £500 from April 2024.
Changes to the non-dom rules were trailed in the press, but there were no announcements of changes to, or a review of, the non-dom regime, apart from a very specific anti-avoidance measure concerned with share for share exchanges involving non-UK companies which came into effect immediately.
Although the current CGT annual exempt amount of £12,300 will be reduced to £6,000 from April 2023 and £3,000 from April 2024, despite press speculation in the build up to the Autumn Statement there were no announcements of a review of, or changes to, capital taxes.
With January 2025 being the latest date for the next General Election, and the Government’s need to demonstrate stability as it is gearing up towards putting together its election manifesto, it would appear that, for now at least, the stable period for capital taxes continues.
With the possibility of a change of Government on the horizon, individuals, their families and businesses may now wish to take stock of their current position and future plans to confirm they are still fit for purpose and meeting their longer-term objectives.
