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CGT: The Exodus Of Landlords And The Shrinking Exemption

Cuts and the changing landscape of UK taxation ...


Posted by Roger Eddowes on 28/09/2023 @ 8:00AM

The UK's financial landscape has been witnessing a significant shift, particularly in the realm of taxation. One of the most notable changes is the steady rise in the number of taxpayers subject to Capital Gains Tax (CGT) ...

Many are now paying more in CGT than they might have anticipated!

Many are now paying more in CGT than they might have anticipated!

copyright: flyfin / pixabay

Recent figures from HMRC highlight that the 2021/22 tax year saw almost 400,000 Britons paying CGT. To put this into perspective, this is double the number from a decade ago, with the total tax bill amassing a staggering £16.7 billion.

"So, what's driving this surge in CGT payments?"

The primary catalyst behind the surge is the Chancellor Jeremy Hunt's decision to slash the annual exempt amount. This is the threshold of capital gains an individual can accrue before they're liable to pay CGT. In a move that has taken many by surprise, the rate was cut from £12,300 to £6,000 in April.

But the reductions don't stop there. Come April 2024, this amount is set to plummet further to a mere £3,000. I feel we are on the brink of an 'explosion'. With such drastic reductions in the annual exempt amount, it's no wonder that taxpayers are feeling the pinch.

"Another significant factor is the changing dynamics
of the property market!"

Over the past 12 months, there's been a noticeable exodus of landlords. Why? The tightening tax laws are making buy-to-let properties a less enticing investment. As more landlords opt to sell up, the CGT coffers are naturally swelling. Interestingly, CGT now overshadows inheritance tax in terms of revenue, with the latter's annual bill standing at just over £7 billion.

It's not just individual taxpayers and landlords who are grappling with the CGT changes though. Business owners are also feeling the heat. The lifetime limit for Business Asset Disposal Relief, a significant relief for many entrepreneurs, has been slashed from £10 million to just £1 million.

"This means many are now paying more in CGT than
they might have anticipated!"

The landscape of UK taxation is undeniably evolving. As the annual exempt amount for CGT continues to shrink, and as tax laws tighten, it's crucial for individuals, landlords, and business owners to stay informed and adapt their financial strategies accordingly.

Until next time ...

Business Godparent


Would you like to know more?

If anything I've written in this blog post resonates with you and you'd like to discover more about Capital Gains Tax and how it may affect you, it may be a great idea to call me on 01908 774320 and let's see how I can help.

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About Roger Eddowes ...


Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.

Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.