Unclear future for Capital Gains Tax (CGT) – Accountancy Age

Despite more than a 100% increase in CGT receipts in the past five years, understanding whether tax rates for CGT will be increased or not is hard to predict, especially with the upcoming 2023 Autumn Statement in November and the possibility of a change of government at the next General Election, to be held at the latest by January 2025. However, businesses are taking note and planning ahead where possible.

Katharine says: “We may not have a clearer picture of what could be on the horizon until at least the Spring Budget in 2024 or the publication of party manifestos in advance of next year’s General Election.” Katharine’s advice for businesses however is to wait for a clearer picture of what could be coming next for CGT. “As there is no indication that we could see an increase to CGT rates in the Autumn Statement, I’d suggest it isn’t necessary at this stage for businesses to rush to sell their assets in order to beat a potential tax hike.”

You can read Katharine’s comments in full here.

As always, tax planning is key – for assistance with your tax affairs and to minimise your tax liabilities, contact Katharine here or a member of our Private Client team.

Changes to Capital Gains Tax rules for divorcing couples

Under the old rules, when a married couple or civil partners separate, they could transfer assets between them in the tax year they permanently separated on a no gain no loss basis. This meant that the transferring spouse did not have to pay CGT on the assets transferred and the spouse receiving the assets did so at its original base cost.

However, if a transfer of assets occurred after the tax year in which the spouse/civil partners separated, the transfer would have been subject to CGT, the deemed proceeds being the market value of the asset. As a result, by the time of a divorce, dissolution of a marriage or civil partnership, the couple would be liable to CGT when assets were transferred as part of the final divorce settlement.

What are the new CGT rules?

The new rules can be summarised as follows:

  • Separating spouses/civil partners will have up to three years, after the tax year in which they separated, to transfer assets on a no gain, no loss basis. This extension should allow sufficient time for the division of assets and other financial agreements to be agreed upon without the additional worry of how to meet the CGT liability.
  • There will be no time limit to the no gain, no loss treatment for assets that are subject to a formal divorce agreement. This will be welcome news to couples who are unable to finalise their divorce agreements due to the backlog of cases in the family courts. Any spouse or civil partner who retains an interest in the former matrimonial home will have the option to claim Private Residence Relief (PRR) on their share of the capital gain when the property is sold..
  • Favourable treatment also applies where an individual transfers their interest in the former matrimonial home to their ex-spouse or civil partner but remains entitled to receive a percentage of the sale proceeds when the property is eventually sold. They can apply the same tax treatment to the proceeds as when they initially transferred their interest. This means that if PRR applied at the time of the original transfer, the relief will be available when the property is sold, even though they did not live at the property.

Tax planning opportunities

The extension to the time limit for no gain, no loss transfers provides greater tax planning opportunities for separating couples, as they can now make more informed decisions about the assets they transfer. This change is significant – divorce proceedings are emotionally challenging, and it would be fair to say that tax planning might not be a priority. The extension allows couples to plan their financial separation more effectively, resulting in fairer outcomes. This is particularly crucial for individuals with complex asset portfolios, including businesses and properties. In some cases, lump sum payments might be more favourable than direct asset transfers, requiring careful consideration of potential tax liabilities.

While immediate tax can be avoided, future CGT for couples will still be a factor in financial settlements. Under the new rules, CGT is not avoided completely but deferred until the spouse receiving the assets disposes of it. The value of assets transferred to the spouse will therefore be lower as a result of the inherent capital gains.

The new rules do not change the position for individuals domiciled outside the UK or with overseas assets. They may still be subject to taxation in other jurisdictions. It is essential to navigate double tax treaty provisions and international tax rules, to ensure compliance and minimise potential tax implications.


The changes to CGT rules represent a positive step for divorcing couples in the UK. The extended window for asset transfers allows for more comprehensive financial planning, during an emotionally difficult time. They also highlight the importance of informed decision-making and proactive tax planning. As the implications of these changes continue to unfold, professional guidance remains crucial for couples seeking a fair and tax-efficient separation of assets.

For tax advice and support on the CGT rules for separating and divorcing couples,, get in touch with Kay Mind, Director, or a member of our Private Client team.

You can also listen to our podcast with Kay and Danielle Ford, Partner and Head of Tax Disputes & Resolutions, discussing the CGT rules, here.

Rise in Capital Gains Tax receipts – FT Adviser

HMRC’s latest tax figures show that CGT receipts continue to grow, rising by 96 per cent over the past five years. This growth is three times higher than the increase in Inheritance Tax (IHT) receipts over the same period.

Inflation has been a key driver behind recent tax increases, moving taxpayers into new tax thresholds as asset values soar. However, the reduction of the annual exemption for CGT from £12,000 to £6,000, which came into play as of April 6 2023, is likely to increase CGT receipts further.

With more people being brought into new tax thresholds, it means hundreds of thousands of new taxpayers will now be liable to pay CGT. The concern however is that not everyone who is now liable to pay CGT will know that they need to. Katharine notes: “Many taxpayers may be unaware that gifts of a property or shares, for example, to family members can be subject to CGT.”

Katharine’s comments look at HMRC’s ability to manage the additional administrative burden of an increased number of tax returns. To read Katharine’s piece in full, you can read more on FT Adviser.

If you have any queries, please contact Katharine directly or a member of the Private Client team.

Capital Gains Tax (CGT) receipts on the rise: ePrivateclient

The rise in CGT receipts is according to the latest monthly tax figures released by HMRC. Between February 2022 and January 2023, the tax regulator collected a record £18 billion. In January 2023, CGT receipts were £13.2 billion, up 23% over January 2022 when compared like-for-like.

Katharine notes that “with scores of investors having exited the buy-to-let sector over the past year, and inflation causing house prices and asset values to soar, HMRC is reaping the rewards from people’s capital gains.” However, we have yet to see the full impact of the changes to CGT from the Autumn Statement in 2022. In addition, and in advance of the reduction to the CGT annual exemption rate in April 2023, the mood across investors is to streamline their portfolios in anticipation. This could lead to further increases in CGT receipts in January 2024.

Read Katharine’s comments in full in ePrivateclient’s article here (subscription needed).

Tax planning assistance

With the reduction in CGT annual exemption expected to raise an additional £25 million in tax revenue in 2023/24 alone, it makes planning in this area even more important. Our Private Client & Trusts team is on hand to help you make best use of the annual exemption and to plan your tax affairs. Please get in touch with Katharine or a member of the private client team to discuss your needs further. You can also reference our Year End Tax Planning Guide 2023 to help you make the tax rules work to your advantage ahead of the tax year-end.

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