Capital gains receipts set to hit new high

HMRC is on course to take a record £8.8 billion in capital gains tax (CGT) between January and March 2018, according to the Office for Budget Responsibility (OBR).

The prediction is in line with forecasts set by the OBR following the Autumn Budget 2017.

CGT is charged on the disposal of assets that have increased in value, with the gain in value being taxed rather than the amount of money received.

Taxes on any gains made on assets, such as second homes and shares, are expected to hit almost £10 billion in 2018/19.

Growing asset prices are expected to cause a surge in CGT receipts, by almost 5% in 2018.

CGT receipts are then set to increase by a further £4.5 billion in the next 4 tax years, reaching £13.3 billion by 2022/23.

Sean McCann, chartered financial planner at NFU Mutual, said:

"Some of our customers are working in partnership with their spouse to reduce their combined tax bills, taking full advantage of each individual's CGT allowance of £11,300 by transferring shares and property between them.

"However, we've been warning our customers to watch out for potential tax traps. Transferring property between spouses could trigger a stamp duty charge."

Contact us to discuss your tax planning.