The Chartered Institute of Taxation has urged the government to publicise the imminent fall in the CGT annual exempt amount.
The exemption is due to fall from £12,300 to £6,000 on 6 April 2023 before falling again to £3,000 from 6 April 2024.
John Barnett, chair of CIOT’s Technical Policy & Oversight Committee, said:
“A lower annual exemption means some people making smaller gains will now need to pay tax when they previously wouldn’t have.
“We are concerned that many of those now brought into the net will not be aware of this and could be left with tax bills and penalties as a result.
“Coupled with a similar lowering of the income tax dividend allowance, there may be a big increase in the number of people on a smaller income scale who will now be required to fill in a tax return and pay tax. Many of these are less likely to be represented and uncertain of their obligations, or the consequences of getting it wrong.
“We urge the Government to publicise these changes so that as many as possible of those who will be affected by the lowered allowance know their responsibilities and don’t end up with a surprise tax bill in the future .”
The Dividend Allowance is being reduced to £1,000 in April 2023 and to £500 in 2024 (see Income Tax: Reducing the Dividend Allowance). HMRC estimates that 4.4million people will be affected by that change in 2024/25.
https://www.tax.org.uk/publicise-annual-exemption-reduction-to-avoid-surprises
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