Care is needed if you are undertaking and actions prior to the budget at the end of October to avoid falling foul of any anti-avoidance legislation. 
There is speculation that Reeves may adjust Capital Gains Tax (CGT) to help address the gap in public finances, potentially by aligning CGT rates with income tax rates. Whether this strategy will succeed, given that CGT applies to the disposal of assets and taxpayers can adjust their decisions about such disposals, remains to be seen. The availability of tax reliefs will also play a key role.
With limited time before the Budget, it may be worth considering pre-emptive steps if you’re planning to sell a business and are concerned about the potential removal of Business Asset Disposal Relief (formerly Entrepreneurs’ Relief).
If you are thinking of selling shares to realise a gain and then buying them back again, so you have a higher “base cost”, be aware that a reacquisition of shares in the same company within 30 days of that disposal are matched. This can be avoided by disposing of the shares and your spouse acquiring them or transferring them into an ISA or a pension. Be aware though that the CGT gains exemption is only £3,000 this tax year and any gains more than this are liable to tax – subject to any losses brought forward from prior years.
If selling other assets, the tax point for the disposal is the date of an unconditional contract for sale – usually the date of exchange for land and property.
Inheritance tax – this could change significantly – but who knows? If you are thinking of making gifts direct to relatives or friends, you may wish to undertake these before budget day.
Pensions – this is another area flagged up for potential change. If you are going to make pension contributions this year, you may like to do so before budget day, bringing forward any planned payments in the period 1 November 2024-5 April 2025.
We recommend that you contact us before making any decisions.
