Capital Gains Tax receipts are forecast to more than double from £9.2bn in 2021/22 to £19.7bn in 2026/27, according to Government predictions.
Increases in equity prices and changes to entrepreneurs’ relief will be the main causes of the increase, according to forecasts analysed by NFU Mutual.
NFU Mutual says the increase comes despite the Chancellor leaving CGT relatively untouched in his Autumn Budget.
{loadposition hidden2}
The Government expect to collect £9.2bn in CGT this tax year before a “sharp increase” to £13bn next tax year.
Forecasts of CGT receipts
| 2021/22 | 2022/23 | 2023/24 | 2024/25 | 2025/26 | 2026/27 |
CGT estimate | £9.2bn | £13bn | £15.2bn | £16.7bn | £18.1bn | £19.7bn |
Source: Office for Budget Responsibility
Sean McCann, Chartered Financial Planner at NFU Mutual, said, the windfall for the Treasury would also be partly fuelled by the bounceback from the Covid pandemic.
He believes the rise in CGT will fuel a demand for advice as more taxpayers are hit by bills.
He said: “These forecasts – which suggest CGT receipts will more than double in five years – may have prompted the Chancellor to leave the tax alone.
“The projected increase is based on anticipated rises in equity prices in the coming years as the world bounces back from the Covid pandemic. This, combined with the impact of changes to Entrepreneurs’ relief in March 2020, which slashed the lifetime limit from £10million to £1million for those disposing of qualifying businesses, may have influenced the Chancellor’s decision.”
One small recent change to CGT was welcomed by Mr McCann. The doubling of the time to report and pay tax due on gains from residential property from 30 days to 60 days will give people more time to pay the tax after selling or gifting property.
{loadmoduleid 444}
Leave a Reply