Capital Gains Tax Could Be Next: Practical Steps Before the Autumn Budget
With the 28 October Budget approaching, capital gains tax is back on the government’s agenda. It is not difficult to see why: taxing gains more heavily can be framed as a way to make the system fairer, raise revenue and avoid a direct increase in the taxes paid through a monthly payslip.
Rumour has it
Our new Chancellor, John Healy, was reported to have noted that the Britain has the “lowest capital gains tax (CGT) of any European G7 nation”.
Fellow cabinet minsters, Wes Streeting and Louise Haigh, have also said in public that increasing GCT would make the overall system ‘fairer’.
Increasing CGT as a tax raising measure - really?
While the Centre for Analysis of Taxation have estimated that reforms could raise £20 billion in extra revenue by 2030, former IFS Director Paul Johnson has said it would lead to lost receipts.
However, the strongest case for caution has come from the OBR, the Office of Budget Responsibility, the body that delivers the numbers to the Chancellor to inform his annual UK Budget. The OBR highlights that raising capital gains tax (CGT) can shrink the tax base in the following ways:
Forestalling: selling before a known rate rise, creating a temporary pre-change receipts boost.
Lock-in: delaying a disposal after the rate rise, sometimes until death.
Shifting: changing the asset held or taking rewards as income instead of gains, depending on relative rates.
Tax planning: using reliefs, gifts or tax-favoured vehicles.
Migration: changing residence or locating activity in a lower-tax jurisdiction.
Non-compliance: under-reporting or misreporting.
As the lion’s share of CGT is paid by relatively few high-net-worth taxpayers, these potential behavioural responses and decisions appear logical and should be a point of caution for the Chancellor.
What we know today about CGT
For most individuals, capital gains are currently taxed at 18% to the extent they fall within the unused basic-rate band, and 24% above that. The annual CGT exemption is £3,000—so only gains above that amount are generally taxable.
Business Asset Disposal Relief can still apply an 18% rate to qualifying gains, subject to conditions and limits. Trustees and personal representatives are generally taxed at 24%, with a lower annual exemption of £1,500.
These are the rules in force today. Whatever is being discussed ahead of the Budget, it is not policy until it is announced and the detail is published.
A reminder, every individual must consider their CGT position if they sell a tangilble or intangible asset above £6,000 in a given tax year.
What is being discussed ahead of the Autumn Budget on the 28th October
CGT is firmly in the pre-Budget conversation, but there has been no confirmation of change. The areas attracting most attention include:
Higher main CGT rates, potentially closer to income-tax rates. Investors, business owners, landlords and those planning significant disposals would be impacted.
A further cut to, or removal of, the annual CGT exemption. Anyone realising gains outside tax wrappers would be impacted.
Changes to Business Asset Disposal Relief. Company owners considering a sale, succession or restructuring would be impacted.
Reform of CGT treatment on death or gifts, Families, trustees and those undertaking succession planning would be impacted.
It is easy to see why the rumours have gathered pace: CGT can be presented as a tax on wealth rather than earnings.
But a Budget headline is not a reason to rush a sale, transfer or gift. The effective date, transitional rules and final legislation will matter just as much as the headline rate.
Our view: treat every pre-Budget proposal as a scenario to plan around—not an outcome to act on.
Which category applies to you?
The practical implications of a CGT change will vary widely and as noted above, a wide variety of individuals could be impacted.
Start with the question that best fits your circumstances.
Investors with taxable portfolios
If you hold shares, funds or other investments outside ISAs and pensions, establish your potential gains, purchase costs and any available losses. You may have more flexibility over timing than you think—but selling simply to beat a rumoured tax rise is rarely a complete strategy.
Business owners
If you are considering a sale, partial exit, management buyout, family succession or share reorganisation, check the likely gain and whether Business Asset Disposal Relief may apply. Tax matters, but so do valuation, deal readiness and your plans after an exit.
Landlords and second-home owners
If you may sell an investment property or second home, calculate the gain properly before making decisions. Property timing should reflect the market, finance, personal circumstances and available reliefs—not only speculation around the Budget.
Trustees, families and those considering gifts
A gift or trust transaction can trigger CGT even when no cash changes hands. Where the decision forms part of longer-term family or succession planning, it should be considered alongside inheritance tax, ownership and control—not as a reaction to a single Budget announcement.
Practical steps to take now
There is value in being ready. That does not mean rushing into a sale before any changes come into force, the earliest from April 2027 onwards.
Our suggestion at this stage is to act and plan sensibly, such as:
List planned transactions for the next 12 to 24 months, including investments, property, business shares and gifts.
Calculate likely gains accurately, including original purchase costs, enhancement expenditure, transaction costs and any capital losses.
Check the ownership structure of assets, particularly where assets are held jointly, through a company, trust or partnership.
Review reliefs early, especially Business Asset Disposal Relief, hold-over relief and any relevant property reliefs.
Gather supporting documents now. Old share certificates, purchase contracts, property records and company paperwork can be difficult to retrieve under time pressure.
Avoid irreversible decisions based on rumour alone. A lower tax bill is not necessarily a better overall outcome if the timing does not fit your investment, commercial or family plans.
The sensible response is preparation, not panic.
Knowing the numbers gives you options once the Budget detail is known.
What we will update You on Budget Day
Once the Chancellor has delivered the Budget, we will you with a clear summary of:
What has been announced
What has not changed
Who may be affected
When any changes take effect
The practical next steps to consider
We will also flag any immediate action points, including whether transitional rules or anti-forestalling measures affect transactions already under way.
Budget update: to be published on 28 October 2026. Until then, all suggested CGT changes remain speculation rather than confirmed policy.
