Capital Gains Tax Changes

The Coalition Agreement between the Conservatives and the Liberal Democrats that was released yesterday includes an aim of reaching agreement to increase the rate of capital gains tax payable on 'non-business capital gains' to a rate similar to income tax rates. 'Generous exemptions' are anticipated for 'entrepreneurial business activities', but these are not defined.

Non-domiciliaries may also be affected by these changes, possibly because of capital distributions from non-UK trusts or a need to remit the proceeds of non-UK gains to the UK. It is even possible that the remittance basis may be abolished for those UK resident for more than seven years, as proposed in the Liberal Democrat manifesto. Timing may be very important.

As any change in rates may take place immediately following the second 2010 Budget Speech there may only be a very small window of opportunity for planning.

If you anticipate completing a transaction that will be subject to CGT in the next few months please contact your usual Buzzacott contact as there may be planning opportunities that you should be considering.