BudgetMar 16 2023

Budget 2023: Govt to close CGT loophole

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Budget 2023: Govt to close CGT loophole
Jeremy Hunt, UK chancellor of the exchequer, holding the despatch box outside 11 Downing Street in London, UK, on Wednesday, March 15, 2023. (Chris J. Ratcliffe/Bloomberg)
ByJane Matthews

The government has announced plans to close a capital gains tax avoidance loophole.

The move comes as part of yesterday’s Spring Budget, in which chancellor Jeremy Hunt laid out plans to grow the UK economy with the support of around £69bn worth of subsidies.

The government has said it will legislate to close an avoidance loophole that can leave HM Revenue and Customs out of time to assess tax due on capital gains when an asset is disposed of under an unconditional contract. 

The change will apply to contracts entered into on or after April 1 2023 for corporation tax and April 6 2023 for capital gains tax.

No further detail on the change has been provided by the government at this time.

Meanwhile, earlier this month the Labour party said, should it win the next election, it will close another capital gains tax loophole, known as the ‘carried interest loophole’.

As reported in our sister publication, the Financial Times, the UK tax authority is missing out on about £600mn a year as a result of a longstanding perk applied to private equity executive payouts.

Elsewhere in the’s Budget, Jeremy Hunt said although the UK economy will shrink this year it will not fall into a technical recession as previously forecast.