Capital Gains Tax Was Increased, But Sensibly

Filed Under Finance

There has been so much pre-budget speculation about Capital Gains Tax and I, for one, was fearing how it could hurt a range of investment activities, most notably the property and buy to let markets.

Now we actually know that CGT is going to rise to 28% tonight for those on higher tax rates, but will remain at 18% for people in the standard tax band, I have to say that it seems a very sensible approach.

CGT is not rising to 40%, or even 50%, as many feared, but is only increasing by 10% for those who are more likely to be in a position to afford it. I can’t imagine that this will hit property investors too hard, and may not dent house prices too much. That’s a good approach, in my book.

Remember that the tax burden for all of us had to go up to help get the deficit down. Investors sitting on large capital gains will be breathing a sigh of relief now and will be more likely to reluctantly pay the extra tax rather than find ways around avoiding it if it was hitting them at 40%.

It looks like these rises in CGT are a sensible approach to an unavoidable situation.