Capital Gains Tax Allowance Reduced in 2024-25

Changes to CGT Threshold Announced

Impact on Taxpayers

The Capital Gains Tax (CGT) annual exempt amount (AEA) will be reduced from £12,300 to £6,000 for the 2024-25 tax year. This means that individuals will now have to pay CGT on profits over £6,000, rather than £12,300.

The change will impact all taxpayers who dispose of assets, such as property, shares, or investments, and make a profit. It is estimated that the reduction in the AEA could raise an additional £12 billion in tax revenue per year.

The government has stated that the reduction in the AEA is necessary to align capital gains tax rates with income tax rates and ensure fairness in the tax system.