Optimising your tax strategy matters more than ever for investors, landlords and business founders since the April 2025 CGT changes. From 6 April 2025 the main capital gains tax (CGT) rates rose to 18% for basic-rate taxpayers and 24% for higher-rate taxpayers, carried interest moved to 32%, and business asset disposal relief (BADR) increased from 10% to 14% for disposals made on or after 6 April 2025. The annual exempt amount has been pared back to £3,000 – a 67% reduction in just two years – while reporting deadlines remain tight.
Those headline numbers sit against a bigger fiscal backdrop. CGT receipts are forecast to reach £15.7bn in 2024/25, triple the figure recorded a decade ago (according to the Office for Budget Responsibility, 2025). At the same time, property values continue to drift: the median UK house price ended 2024 at £290,000, nearly six times the average salary (according to the Office for National Statistics, 2024). In short, more people than ever risk drifting into higher-rate capital gains tax (CGT) territory, even on modest gains.
With rates up, allowances down and HMRC’s digital systems flagging late filers automatically, a passive approach no longer works. Thoughtful sequencing, smart use of wrappers and meticulous record-keeping can protect cashflow today and keep exit options open for tomorrow.
Do you know the CHT changes from 6 April 2025?
The headline CGT changes are.
- Higher rates – 24% on gains above the basic-rate band for most assets; 18 % within it.
- Property and carried interest – residential property gains match the 18/24% split, while carried interest is a flat 32%.
- Reduced allowance – the annual exempt amount is £3,000, down from £6,000 in 2023/24.
- Business asset disposal relief (BADR) – sole traders and partners pay 14% on qualifying gains up to £1m.
These figures reset the baseline for every disposal decision and make forward visibility vital.
How to optimise your tax strategy since the changes
- Sequence disposals around income bands
Check how far you are from the £37,700 basic-rate ceiling before a sale. Where possible, delay or advance disposals so gains sit in the 18% band. Couples can transfer assets tax-free to spread gains and maximise two allowances. - Use the £3,000 allowance every year
Even small disposals – for example, a partial share sale – can “mop up” the allowance and save up to £720 for higher-rate taxpayers. Bed-and-ISA transactions still work, allowing you to realise gains and shelter future growth. - Shelter growth in wrappers
ISAs remain free of CGT entirely. So do most pension schemes; gains are taxed only when funds are drawn. Prioritise placing fast-growing assets into wrappers and leave lower-growth holdings outside. - Plan property exits carefully
With UK average house prices at £290,000, even modest gains can breach the basic-rate band quickly. If you own multiple properties, stagger sales across tax years to avoid a single-year spike. Consider joint ownership with a spouse in a lower income bracket. - Document reinvestment reliefs
Enterprise Investment Scheme (EIS) shares and certain roll-over reliefs defer or eliminate CGT, but only if paperwork is meticulous. Maintain digital records and supporting evidence for at least five years after the self assessment deadline.
Structuring disposals for individuals
Gift hold-over relief still applies for certain business assets. If you plan to pass shares to adult children, an informal loan note arrangement can spread gains over several years, keeping each tranche within the basic-rate band. Where possible, match losses against future gains rather than the current year to avoid wasting the £3,000 allowance.
Business asset disposal relief and succession
For trading companies, BADR continues to be a valuable route to a 14% rate on qualifying shares. To secure the relief:
- hold at least 5% of both voting rights and economic interest for two years
- ensure the company’s main activity is trading (Companies House filings must reflect this)
- time exit-planning well ahead of mergers and acquistions (M&A) talks – last-minute restructures can invalidate the relief.
If you are considering a management buy-out, speak to our corporate finance team early so we can model different deal structures and cashflow scenarios.
Record-keeping and reporting essentials
CGT returns for UK residential property must be filed within 60 days of completion. Missing the deadline triggers automatic penalties and interest. For all other gains, report via self assessment by 31 January. HMRC’s online CGT real-time service can simplify ad-hoc disposals – bookmark their CGT rates page for quick reference.
Digital record-keeping pays off. Spreadsheets that track acquisition dates, costs, incidental expenses and disposal proceeds make year-end calculations straightforward. Cloud-based solutions integrate with brokerage accounts and feed data directly into self assessment software, reducing manual errors.
Optimise your tax strategy with Thomas Barrie & Co.
How to optimise your tax strategy since the April 2025 CGT changes is not a one-size-fits-all exercise. The revised rates, shrinking allowance and tougher reporting timetable mean yesterday’s comfortable assumptions may now cost real money. By controlling the timing of disposals, using wrappers intelligently, securing BADR where available and keeping impeccable records, you can keep more of each pound of gain and maintain the freedom to pivot when opportunities arise. The earlier you act, the more tools remain on the table.
Contact our specialist tax team today – we’ll map out a tailored plan taking into account the CGT changes and ensure your next disposal is taxed on your terms.