What Would Tax Planning Look Like Under 45% Capital Gains Tax in the UK?
By Joseph Spiers
The UK government is reported to be considering increasing Capital Gains Tax to 45%. Explore potential tax planning strategies, CGT reliefs, ISAs, pensions, losses and business disposal planning.
With speculation growing ahead of the Autumn Budget, reports suggest that the UK’s Labour government and Chancellor John Healey could be considering changes to Capital Gains Tax (CGT) that would see the rate rise as high as 45%. The proposal, reportedly linked to plans to raise the Income Tax personal allowance, would represent a significant change from the current CGT regime and could have major implications for investors, landlords, business owners, and anyone sitting on substantial capital gains.
Chancellor Healey has declined to comment on speculation about potential tax changes ahead of the Autumn Budget, which will be released on 28 October 2026.
So, what would tax planning hypothetically look like under a 45% CGT rate in the UK?
From the timing of asset disposals and use of ISA allowances to capital-loss planning, business-sale reliefs and property ownership, a higher CGT rate could make advance planning considerably more important. For investors, landlords and business owners, the focus would likely shift towards taking a more structured approach to managing taxable gains, making full use of available reliefs and allowances, and considering the tax implications of major transactions well before they take place.
What would a 45% Capital Gains Tax rate mean?
Capital Gains Tax generally applies when you dispose of chargeable assets and make a taxable gain. These can include investments, second homes and buy-to-let properties, business assets, and shares held outside tax-efficient accounts.
As of the 2026/27 tax year, the main CGT rates for individuals are 18% and 24%, while the annual exempt amount is £3,000. Qualifying gains under Business Asset Disposal Relief can be taxed at 18%. Under a 45% CGT regime, the difference could be substantial.
For example, suppose an investor has a £100,000 taxable capital gain after allowable deductions and reliefs.
At 24%, the CGT would be: £100,000 × 24% = £24,000
At 45%, it would be: £100,000 × 45% = £45,000
That is an additional £21,000 of tax on the same taxable gain.
The precise outcome would depend on how a 45% regime was designed. A future government could introduce different rates for different assets, retain reliefs, change allowances or introduce transitional arrangements.
What would tax planning look like under a 45% Capital Gains Tax rate?
Timing of disposals
If CGT were increased to 45%, the date on which an asset is sold could become considerably more important.
An investor considering selling shares, an investment property or a business might need to compare:
Selling before a potential rate increase
Selling after the increase
Splitting disposals across tax years
Using available annual exemptions
Realising losses alongside gains
Using tax-efficient investment wrappers for future investment
However, deliberately delaying or accelerating a transaction purely for tax reasons would need to be considered alongside investment returns, transaction costs, market conditions and the possibility that tax legislation could change.
Could selling before a 45% CGT increase save tax? Potentially, yes - if legislation actually introduced a higher rate from a specified future date and the existing rate remained available before that…