With rumours circulating about the UK CGT tax rates being brought inline with income tax I was wondering if;

  1. Would the rate increase only take place from a future tax year e.g. 2022/23 onwards?
  2. Or, could the tax rate be retroactively applied to the 2021/22 tax year?

The increase would be substantially bigger from 20% to 45% therefore it would be good to know if this does take place, should assets be sold off before the end of this tax year.

  • 2
    What do you plan on doing with the money you will get from the sale of your appreciated stocks? Invest it back into other stocks? Keep it in a sock under your mattress? You are planning on generating a lot of income for yourself right now and paying tax on it (at lower rates than might apply in the future) but is this a wise decision? Are you letting the tax tail wag the investment dog? Oct 8 '21 at 19:22

Retroactive taxation, in the sense of a higher rate being applied to a liability you have already incurred without knowing about the rate, is almost unheard of.

What does sometimes happen is that a tax change is announced to take immediate effect with the legislation put through later, taking effect from retrospectively from the point of the announcement - but not from before the day of the actual announcement.

Given that the next budget is going to be October 27th, it's very plausible that if they do raise CGT, they'll do something so that it takes effect for any disposals made from that point on, to avoid a stampede of people doing what you are suggesting.

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