Significant changes are coming to the Capital Gains Tax (CGT) allowance, and it's crucial to be aware of these changes to optimize your investment strategy. In this article, we'll discuss the upcoming reductions in the CGT allowance and explain why investing in CGT-free gold is more critical than ever.
Upcoming Changes to Capital Gains Tax Allowance
On November 17th, during the Autumn Statement, the Chancellor announced that the allowance available to taxpayers liable to Capital Gains Tax would be reduced. Currently, the allowance stands at £12,300, but it will decrease to £6,000 starting in April 2023 and further drop to £3,000 from April 2024.
Capital Gains Tax is a tax paid when you sell or gift specific items, including assets such as land, property (including second homes), or shares held outside of an ISA or PEP. CGT is calculated based on the difference between the original acquisition price and the value of the item when it is sold or gifted. Certain expenses can be deducted from this figure before tax calculation. Previously, the annual allowance enabled couples with jointly owned assets to avoid paying tax on gains up to £24,600. However, starting April 2023, this tax-free sum will reduce to just £12,000.
Impact on Taxpayers
For taxpayers, these changes can result in a significant increase in the amount of tax owed. If your CGT rate is 10%, you could be facing an additional tax payment of £630 per person, or £1,260 if your rate is 20%. The rates for residential property are even higher, at 18% and 28%.
If you plan to sell or gift any assets soon, it's essential to consider the timing of your asset disposal. You may want to act before the CGT allowance reduction to take advantage of the higher tax-free sums currently available.
The Importance of CGT-Free Gold
In light of the impending changes to the CGT allowance, investing in CGT-free gold has become more critical than ever. By choosing CGT-free gold, you can avoid paying Capital Gains Tax when you sell or gift your gold investments, which can help you maximize your profits, particularly given the reduced allowance taking effect in the next few years.
As the CGT allowance continues to decrease, it is essential for investors to consider the benefits of CGT-free gold as a key component of their investment strategy. By doing so, you can avoid paying additional taxes and protect your hard-earned gains. Don't let the upcoming changes in Capital Gains Tax catch you off guard – explore the advantages of CGT-free gold investments today and secure your financial future.