Will the UK get a change in CGT threshold today?

With the UK budget today, will we get a change to the CGT threshold???

With 212 I invest using the ‘Invest’ account, and having the current £12,300 allowance is great.
There was talk of this getting hugely reduced…

Let’s see what Mr. Rishi Sunak delivers today for us investors… An increase in ISA allowance would be wonderful also! :slight_smile:

I’d expect nothing. ISA stays the same, cap gains limit stays the same. I’d expect some changes to the banding though.

I think it will be lots of additional stimulus not so much reclaimed spent money - this year anyway.

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I ‘think’ ISA allowance is already announced as frozen at £20k

CGT feels like a change is coming. EITHER thresholds down OR alignment of Capital rates with Income. But hopefully not BOTH.

Either way today is the most nervous I’ve felt for years.

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I hope so. Maybe bigger changes next year like you say,

Given we are allowed to invest 20k a year in an ISA and gains are tax free, if they simplified the rules so you could contribute to multiple ISAs of the same type each year as long as you remain under the limit, I would be happy for the CGT threshold to be reduced.

How many people can actually save 20k and make more than 12k of gains outside a tax free wrapper?

It must be difficult to try and balance the books fairly.

I like the idea of aligning cgt with income rates from a simplicity point of view as well. Impact wise I’ve not thought it through fully.

Property should be CGT free however, or at least your first home.

They need to rebalance business rates too. Rates should be tiered and based more on profit not location, and companies with a high labour count need to be given incentives to maintain employee numbers.

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I’d love for them to scrap the rule of only having one ISA of the same type, makes no sense in 2021 to have to have everything with one.

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I’ve wanted this for so long.

Precisely. Especially seen as we can have different types of ISAs. If someone is going to try and take the Miguel then it’s going to happen with the current situation.

At £20k a year I’m unlikely to ever hit the limit anyway!

As for CGT: it would have to be dramatically reduced to affect me. Down to £1,000 or so. I’m not suggesting you do this, Rishi!

Tax makes me cry into my cheque book.

What’s a cheque book :upside_down_face:

A collector’s item. :blush:

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However much I’d love this to be the case. I buy written off vehicles and the UK DVLA, in 2021, only accepts cheques for registered keeper certificates.

Thats pretty cool, I assume you do them up for profit, or sell on for others to do the work?

Much be one of last cases that a cheque is required. I haven’t personally used one since the millennium. :sweat_smile:

I would guess a lot of people under 25 today might never have used one or even seen one.

I expect CGT to change, to align with Income tax. And as far as I know, this will take effect from 6 April 2021 … so it gives us a little bit of time and control over the situation.
In my case, I used 20k for my ISA and after that I added more money on Invest where I had pretty good results (more than 100k £ profit in the last 6 months). The changes announced today will prooly force me to sell my positions on Invest account just to make sure I pay 20% tax instead of 40%.
But the future doesn’t look great with 40% CGT on Invest profits :frowning:

GLTA

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Just an enthusiast tbh, done a few now because I’ve wanted to drive/ride them, keep them a few months then sell, and it’s by far the cheapest way to do this. On my current car I saved 30% by buying it written off and repairing it myself. I stay away from structurally damaged cars (Category S) but have no issue with Category N non structurally damaged vehicles. Sadly Copart has raised their fees substantially for low volume buyers recently so I decided not to renew for '21. If you have ever played with Meccano, you can fix a category N write off :+1:

It’s the only thing I have ever had to use a cheque for, making it quite novel but with 50 cheques in the book, I doubt I’ll ever fill it :joy:

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I personally have more eyes on corporation tax, I am not expecting to pay CGT on anything for years as investment through ISA.

I haven’t really seen the Government talk about Investments on the few years I watched the Budget. Although I did read that they reduced the Dividend Threshold from £5000 to £2000.

Hoping this isn’t reduced further as it will kill shares of Companies that give Dividends over Growth.

Hoping the CGT increases also despite being new and not having that much profit yet.

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I dont think they can increase Corporation tax and reduce even more the dividend allowance especially after giving little help to small companies over covid. As most company directors of small businesses lots of their pay is classes as dividend which is first charged corporation tax then dividend tax so would be a double whammy.

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Is that not part of the issue though. Paying a reduced salary and taking a dividend results in less taxes and National Insurance to the government. Reminds me of an article in the BBC around last July, a group of builders saying that 80% of their salaries doesn’t support them. They had 3 cars and two homes and relied on their dividend income to pay off the loans which the furlough scheme wasn’t covering.

Well I cant talk for tradesmen and similar who part of it is cash in hand element I believe. But many small companies and individuals trade ltd for 2 reasons:

  1. Companies they deal with wouldn’t trade with a self employed with no legal structure.
  2. Income varies, so ltd comp and dividends allow to pay less or more, if paid all through PAYE in ltd company then not flexible in good/bad times. Eg. over covid people lets say cant pay themselves as much then they can still take the PAYE portion and pay less dividends.

I am aware most people who are not ltd company think its purely a tax dodge but for small companies 80-90% reason isnt that, and they were shafted by no help unlike self employed/furlough. I know several local businesses struggling so just some info but I know many will disagree.

Yeah agree with what your saying. There is never going to be a one size fits or suits all and always moving goalposts as well.

how a person gets paid for their work isn’t the issue. the greed of people who are financial well off but claim otherwise for some sort of benefit is the real problem in that example. in the end their salary would be hard to pay for them since they own so many things that have a monthly expense LOL. they should sell a car and see how much easier it is to meet their payments while on furlough :wink:

Ultimately, the people who pay the most toward Tax and National Insurance, are the same people who see the least return for doing so. 1 person in the higher tax brackets ends up paying for the multiple people at the bottom of the hierarchy pyramid who use the services without end, despite not paying nearly anything towards the costs accrued. the result is less people are willing to pay that cost on another’s behalf.

it’s a matter of, the better off you are, the less likely you are to have issues that require you to use the service at all. I pay my NI and despite it not being much, I have never used the NHS for anything since I started working, so I am covering the costs of other people who go there with this weird mindset of “I paid for this so lets get my moneys-worth” when their costs amount to many times more than what they paid in.

uncertain markets when you work for yourself or as a small group definitely mean its safer to reduces the outright expenses when business drops, so getting paid in dividends just makes a whole lot more sense than giving yourself a higher salary and then a year comes along where you can’t collect that salary as you had no work :frowning: