The Chancellor confirmed that the lower and main rates of Capital Gains Tax (CGT) both increased for disposals on or after 30 October 2024, to, respectively, 18 per cent and 24 per cent.
This brings the rates in line with those already charged on gains from selling residential property.
Disappointingly, she also confirmed that the CGT rate for gains attracting Business Asset Disposal Relief (BADR) would increase from 10 per cent to 14 per cent effective from 6 April 2025, and again to 18 per cent from 6 April 2026.
This represents a significant tax increase for entrepreneurs at the exit stage – scant reward, perhaps, for people who often take large risks and work long hours in order to build and run a successful business.
One small consolation was that the BADR Lifetime Limit was maintained at £1m, though of course it is quite possible this could be reduced in a future Budget.
In the private equity space, the CGT rate applicable to carried interest will increase to 32 per cent with effect from April 2025, with further changes following in 2026.
