As we approach the end of the current tax year, Armagh-based accountancy firm Wylie Ruddell is encouraging people to take steps now to maximise tax efficiency and mitigate any avoidable tax charges before 6th April when the Capital Gains Tax annual tax-free allowance will be slashed.

Capital Gains Tax is a tax on the profit when you sell something that’s increased in value – such as a second home and stocks and shares.

In the Autumn Budget, Chancellor of the Exchequer, Jeremy Hunt, announced changes to the Annual Exemption which will see it drop from £12,300 to £6,000 from 6th April 2023. The amount will be halved again, to £3,000, from 6th April 2024. 

Andrew Cornett, Senior Tax Adviser at Wylie Ruddell Chartered Accountants said: “One of the biggest changes in Capital Gains Tax in recent times is the upcoming reductions to the Annual Exemption which will see many more disposals coming into the scope of tax, and at a higher rate of tax.”

“For example, a couple could sell an investment property right now and the first circa £25,000 would be tax free due to 2 x £12,570 Annual exemptions. However, if we fast forward to 6th April 2024, that £25,000 drops to only £6,000 tax-free between a couple. And if that £19,000 was taxed at 28% it’s an additional tax cost of £5,300 for the couple in question!”

It’s true that a lot of disposals, such as an investment property, can’t just happen straight away, but it’s worth looking at your investments, for example any shareholding where a sale could be done ahead of 6th April, to make the most of what can be saved before the tax-free allowance is slashed,” Andrew continued.

To find out how Wylie Ruddell Accountants can help with your tax requirements, call 028 37 523 227, email andrew@wylieruddell.com or go to www.wylieruddell.com