Rishi Sunak may increase Capital Gains Tax as ‘low hanging fruit’ in the Budget – act now

Rishi Sunak, Chancellor of the Exchequer, will be tasked in mere days time with laying out Britain’s economic approach for the next year. The Chancellor will be required to steer Britain’s course out of the pandemic, as well as offering support to the millions of people still feeling the impacts of COVID-19. Many have speculated the Treasury could be looking to claw back at least some of the large sums of money it has spent in the last year funding support for Britons.

“For a Treasury that is looking to pinch some pennies, CGT looks like low hanging fruit.”

There are certain rules involved when it comes to Capital Gains Tax which are worth noting.

Britons currently have a tax-free allowance of £12,300 per year, or £6,150 for trusts, with some assets not subject to tax at all.

People will be taxed on the gain they make, rather than the amount of money they receive when they dispose of an asset.

This includes selling it, giving it away as a gift, receiving compensation for something or swapping it for something else. 

“That could stamp some thrifty credentials on a Budget that risks being perceived as profligate.”

The Budget will occur on Wednesday, March 3, 2021, where the Chancellor will announce key economic measures.

It is yet to be seen, however, how Mr Sunak will navigate the economy throughout the next year. 

Mr Khalaf concluded by providing insight into what could occur in mere days time. 

He said: “The tussle between economic stagnation and combustion leaves the Chancellor performing a high wire tight rope act in next week’s Budget.

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“One one side lies spiralling Government debt an potentially rampant inflation, on the other side, a faltering economy and more job losses.

“The Budget is likely to remain focused more on providing support for the economy for the time being, while also signalling greater fiscal prudence coming down the tracks.”

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