Capital Gains Tax rates have increased for disposals from 30 October 2024, with further changes ahead. Stay informed on the updated rates for assets, property, and reliefs to optimise your tax planning.

We would like to remind our readers of the updated Capital Gains Tax (CGT) rates that apply to gains realised on or after 30 October 2024. The main CGT rates for assets other than residential property and carried interest has increased to 18% (from 10%) for Income Tax basic rate payers, and to 24% (from 20%) for Income Tax higher rate payers.

For trustees and personal representatives, the CGT rate will has also increased to 24% (from 20%) for disposals made on or after 30 October 2024. The CGT rates for residential property disposals (18% and 24%) remain unchanged.

The CGT rate for Business Asset Disposal Relief and Investors’ Relief will increase from 10% to 14% for disposals made on or after 6 April 2025. A further increase to 18% will apply for disposals made on or after 6 April 2026. The lifetime limit for Business Asset Disposal Relief remains unchanged at £1 million, but the lifetime limit for Investors’ Relief will be reduced from £10 million to £1 million for qualifying disposals made on or after 30 October 2024. Special provisions apply to certain contracts entered into before 30 October 2024.

Additionally, the normal and higher rates of CGT on carried interest (currently 18% and 28%, respectively) will rise to a single unified rate of 32% from 6 April 2025. From April 2026, carried interest will be subject to a broader package of policy changes, which will be announced at a later date.

Ensure compliance with HMRC rules when providing company cars. From P46(Car) submissions to benefit reporting, learn what steps to take for private use and specific exemptions.

Here are the steps you need to follow to inform HMRC if you make any cars available for private use by company directors or employees. Private use of a car includes employees’ journeys between home and work, unless they are traveling to a temporary work location.

You must submit a P46 (Car) form to HMRC if you:

• Provide company cars to employees
• Stop providing a company car
• Provide an additional car to someone

You can submit the form in the following ways:

• Complete it online and send a printed copy to the address listed on the form.
• Use HMRC’s PAYE Online service for employers.
• Use your payroll software.

Additionally, you must report the car benefit on your end-of-year forms and pay Class 1A National Insurance on its value. You must also notify HMRC if a company car is replaced.

You do not need to notify HMRC if you provide:

• 'Pool' cars, which are used by multiple employees for business purposes and usually kept on your premises.
• Cars adapted for employees with disabilities, if the only private use is for commuting.
• Emergency vehicles used exclusively by on-call employees in police, fire and rescue, ambulance, or paramedic services.

Advisory fuel rates for company cars help employers and employees manage fuel costs without triggering tax liabilities. Learn how to use these rates to avoid tax, especially car fuel benefit charges.

HMRC's fuel rates also known as advisory fuel rates are intended to reflect average fuel costs and are updated quarterly. These rates only apply to employees using a company car.

The rates can be used either by employers who reimburse employees for business travel in their company cars or where employees are required to repay the cost of fuel used for private travel.

HMRC will accept that there is no taxable profit and no Class 1A National Insurance on reimbursed travel expenses where employers pay a rate per mile for business travel no higher than the published advisory fuel rates.

Employees can also use the advisory fuel rates to repay the cost of fuel used for private travel. This is the easiest way to ensure that no fuel benefit charge (for private journeys in a company car) is payable. However, the fuel benefit charge will still be payable if it cannot be demonstrated to HMRC that the driver of the car has paid for all fuel used for private journeys, this includes commuting to and from work. To ensure that this does not occur employees will need to keep a log of private mileage.

Inheritance Tax nil-rate bands remain frozen until April 2030. Learn how this affects estates, the residence nil-rate band, and planning opportunities to maximise tax-free inheritance for loved ones.

The Inheritance Tax (IHT) nil-rate bands have been frozen for a number of years and had been set to remain at current levels until 5 April 2028. As part of the Budget measures, it was confirmed that the rates will remain at the same level for a further 2 years until 5 April 2030.

This means that:

• the nil-rate band will continue at £325,000;
• residence nil-rate band will continue at £175,000; and
• residence nil-rate band taper will continue to start at £2 million.

The residence nil rate band (RNRB) is a transferable allowance for married couples and civil partners (per person) when their main residence is passed down to a direct descendent such as children or grandchildren after their death. The allowance is available to the deceased person’s children or grandchildren.

Any unused portion of the RNRB can be transferred to a surviving spouse or partner. The RNRB is on top of the £325,000 nil-rate band. The allowance is available to the deceased person's children or grandchildren. Taken together with the current IHT limit of £325,000 this means that married couples and civil partners can pass on property worth up to £1 million (£325,000 x 2 plus £175,000 x 2) free of IHT to their direct descendants.

The transfer does not happen automatically and must be claimed from HMRC when the second spouse or civil partner dies. This is usually done by the executor making a claim to transfer the unused RNRB from the estate of the spouse or civil partner that died first.

There is a tapering of the RNRB for estates worth more than £2 million even where the family home is left to direct descendants. The additional threshold will be reduced by £1 for every £2 that the estate is worth more than the £2 million taper threshold. This can result in the full amount of the RNRB being tapered away.

From April 2026, Making Tax Digital for Income Tax (MTD for ITSA) will transform tax compliance for businesses, self-employed individuals, and landlords, mandating digital record-keeping and online submissions. Get prepared!

The mandatory signup for Making Tax Digital (MTD) for Income Tax is set to commence from April 2026. MTD for ITSA will fundamentally change the way relevant businesses, the self-employed and landlords interact with HMRC. The regime will require businesses and individuals to register, file, pay and update their information using an online tax account.

The rules will initially apply to businesses, self-employed individuals and landlords with an income of over £50,000 annually. MTD for Income Tax will then be extended to those with an income between £30,000 and £50,000 from 6 April 2027. A new system of penalties for the late filing and late payment of tax for ITSA will also apply.

It was announced as part of the recent Autumn Budget measures that MTD for Income Tax will be extended to sole traders and landlords with income over £20,000 by the end of the current Parliament. The precise timing of this change has yet to be confirmed.

HMRC states that, MTD for Income Tax is a new way of reporting income and expenses if you’re a sole trader or landlord. You’ll need to:

• use software that works with Making Tax Digital for Income Tax;
• keep digital records of your business income and expenses;
• send us quarterly updates; and
• submit a tax return and pay tax due by 31 January the following year.

If you have volunteered to test the MTD for Income Tax service then the new late submission penalties and late payment penalties will apply. If you are looking to volunteer now then you will be required to confirm that you agree that the new penalties will apply to you as part of the sign-up process.

The new penalties apply as following during the testing phase.