CGT fears rise as investors consider delaying sales ahead of Budget
Speculation that the government may raise capital gains tax to help fund an increase in the personal income tax allowance is prompting property investors to reassess disposal plans.
Useful takeaways from this story.
Reports suggest the government is considering aligning capital gains tax (CGT) more closely with income tax and could raise rates, with figures as high as 45% floated in public discussion.
Public finances are under pressure: public sector borrowing reached £18.3bn in August, £3.5bn above forecasts, which is feeding talk of new revenue measures.
Higher CGT could prompt some landlords and investors to delay property sales to avoid increased tax bills, but advisers warn against making decisions based only on speculation.
# What's happening
Speculation is growing that the Chancellor may change capital gains tax (CGT) rules in next month's Budget. The idea gaining traction is to bring CGT closer to income tax rates, with public discussion including suggestions that CGT could rise as high as 45%.
# Why this is on the table
Public sector borrowing numbers have increased pressure on the Treasury. Official figures show public sector borrowing reached £18.3bn in August, which is £3.5bn more than forecast. That shortfall is being linked in media and industry coverage to consideration of new revenue measures ahead of the Budget.
# How investors might react
Market commentary in the article highlights a behavioural response: when tax on disposals looks set to rise, some investors choose to delay sales to avoid crystallising gains at a higher rate. Susannah Streeter, chief investment strategist at Wealth Club, said tax speculation is intensifying and that higher CGT could lead some investors to hold assets instead of selling.
# A caution against knee-jerk moves
Streeter also warned against making portfolio decisions purely on speculation. The article advocates keeping broader investment strategy in view rather than letting potential tax changes be the sole driver of behaviour.
# What has been confirmed
The government has not announced any CGT changes. Reporting so far covers proposals, submissions and market reaction rather than confirmed policy.
# Practical next steps for investors
- Review timing of planned disposals but avoid locking in decisions based only on press speculation.
- Speak to a tax adviser about how different CGT scenarios would affect your individual position.
- Consider liquidity and income needs if delaying a sale would affect cashflow or tax position in other ways.
# Bottom line
Talk of higher CGT ahead of the Budget is creating uncertainty for property investors. That uncertainty may push some to delay disposals, but there's no confirmed change yet and advisers recommend assessing options with an eye to overall strategy rather than headlines.
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