Sarah Bradford examines the impact of the reduction in the higher rate of capital gains tax on residential property gains and the rules for reporting the gain and paying the tax.
For capital gains tax (CGT) purposes, all gains are not equal. Higher rates of tax apply where the gain relates to residential property. There are also stricter reporting and payment deadlines.
For both 2023/24 and 2024/25, capital gains other than those relating to residential property (or carried interest) are taxed at 10% where income and gains fall within the basic rate band (set at £37,700 for both 2023/24 and 2024/25) and at 20% where income and gains exceed the basic rate band. However, where the gain relates to the disposal of residential property, the gain is taxed at 18% where gains do not exceed the basic rate band. For 2023/24, the rate of tax is 28% where income and gains exceed the basic rate band. This tax rate is cut to 24% for
