The Budget: CGT and Inheritance Tax Impact !

The Labour Government has today made the following announcement to the following taxes relevant to Estate Planning:

Capital Gains Tax:

1. Increasing the lower rate from 10% to 18%

2. Increasing the higher rate from 20% to 24%

3. Maintaining the rates on residential property at 18% and 24%

4. Business Asset Dispoal Relief is to stay at 10%, raising to 14% in April 2025 and 18% in April 2026.

Inheritance Tax:

1. Tax Free allowance of £325,000 is frozen until 2030

2. Residential Nil Rate Band is also frozen until 2030

3. Inherited Pensions will come into calculations in April 2027

4. Agricultural and Business Property Relief will change from April 2026:

   1. The first £1m will attract 100% relief

   2. After that, a 50% relief will apply

   3. Alternative Investment Market (AIM) portfolios will attract a 50% relief

There will also be a change to domicile and non-domicile rules to come.

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