Graduate Legal Executive
Legacies | National Charities
This website will offer limited functionality in this browser. We only support the recent versions of major browsers like Chrome, Firefox, Safari, and Edge.
HM Revenue & Customs (HMRC) has announced that the annual exempt amount for Capital Gains Tax available to personal representatives (PRs) will be reduced from 6 April 2023.
The current annual exempt amount is £12,300 for PRs.
For the 2023/24 tax year, the annual exempt amount will be reduced to £6,000 for PRs and individuals.
For the 2024/25 tax year and subsequent tax years, the annual exempt amount will be permanently fixed at £3,000 for PRs and individuals.
The following Capital Gains Tax rates apply:
It is estimated that for the year 2023/24, around 500,000 individuals and trusts could be affected by the reduction in the annual exempt amount.
The economic recovery, following the Covid-19 pandemic and subsequent increase in house prices, has led to the value of assets in estates increasing, with many exceeding the annual exempt amount and therefore potentially liable to Capital Gains Tax.
Impact and objectives of HMRC
The Office for Budget Responsibility has confirmed, in the 2022 Autumn Statement, that the changes to the annual exempt amount will have the following exchequer impact (£m):
|Year||Exchequer impact (£m)|
According to the policy paper Capital Gains Tax: Annual Exempt Amount published on 21 November 2022, "this policy supports the government’s objective of putting the public finances on a sustainable path in a way that is fair, with everyone contributing a little and those on the highest incomes taking on a larger burden."
Please contact someone in our Charity Probate team if you would like further information in relation to the annual exempt amount or 'appropriating' assets.