The Autumn Budget 2024 - Changes to Capital Gains Tax and Business Asset Disposal Relief

Ahead of this year’s Autumn Budget, the first for the new Labour Government, there had been a lot of speculation the Chancellor would increase capital gains tax to bring them more in line with income tax rates. 

Indeed, pre-Budget speculation led to a frenzy of activity with buyers and sellers rushing to complete business sales and purchases before the Budget date in case any tax increases were to be implemented straightaway. 

As anticipated, the main rate of capital gains tax has been increased with immediate effect from 10% to 18% for basic rate taxpayers and from 20% to 24% for higher rate tax payers. 

Where the gain is created from the sale of shares in a business or the disposal of business assets, the good news is that the rate of Business Asset Disposal Relief (BADR) has been retained at the rate of 10% until 5 April 2025.  

However, after the next tax year, the rate of the relief will be increased to 14% for the 2025/2026 tax year and then it will increase again to 18% for the 2026/2027 tax year. 

The ability to claim Business Asset Disposal Relief remains attractive for business owners, but not as attractive as in past years.

Given the change in the rate of relief for BADR we anticipate some business owners who were thinking about selling up in the next few years might decide to bring their plans forward to take advantage of the better rate of relief for CGT which could be good news for investors or those looking to expand or consolidate their market share. We anticipate the next 6 months could bring an increase in business sales and purchases.

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To see how Jordans Solicitors can help your business please contact us for further information on 0330 300 1103 or see Commercial Services below.