CGT shake-up is both threat and opportunity

“All the tax would be payable at the end of January 2022, but subsequent instalments of sale proceeds might be receivable over a longer period.

“If this route is followed, it is critically important that you have complete faith in the ability of the purchaser to pay the deferred instalments when they fall due.”

Last week, Mr Sunak warned the “economic emergency” caused by the coronavirus crisis had “only just begun”, with experts forecasting that the economy would remain scarred until 2025.

Clive Waller, managing director at CWC Research, said: “Simplistically, I would not sell for tax reasons unless a sale was in mind anyway. It often doesn’t work.

“We just do not know. If you plan to sell in the next one to three years, now might be good. Otherwise, struggle on!”

It is expected the government will borrow £394bn this year, or the equivalent of 19 per cent of GDP – the highest level of borrowing in the UK’s peacetime history.

Tim Holmes, managing director at Salisbury House Wealth, warned the rumours swirling around CGT rises were “very unhelpful to taxpayers”.

Mr Holmes added: “They put pressure on them to make risky decisions about what to do with their assets. It would be good to see the chancellor quickly provide clarity about the future of CGT so people don’t lose out unnecessarily.”  

Potential upside

However, some advisers claimed it presented an opportunity. Minesh Patel, chartered financial planner and director for EA Financial Solutions, said the review gave advisers “the opportunity for us to have discussions with clients again”.

He said: “The review will provide the opportunity for us to talk to clients about this important subject.

“If we want to provide value and prove our service is valuable, this is a good touch point and a chance to review stuff with your clients.”

Rachael Griffin, tax expert at Quilter, agreed. She said: “[The proposed changes] provide advisers with an excellent opportunity to check back in with their clients and assess whether their current financial plan is still fit for purpose.

“The main message is that it is more important than ever before for clients to think about using their allowances and exemptions.”

Ms Griffin added the changes could also be a potential source of new business for advisers, as the number of consumers paying tax on capital gains would be expected to double each year.

She said: “Ultimately, this would mean that more people need tax planning advice.”

Sian MacInnes, adviser at Philip James Financial Services, agreed it would shake up the process with clients, primarily over inheritance tax planning.

She added: “Most clients regularly use the capital gains tax allowances in a small way, perhaps to make their Isa allowance each year from a general investment account and if there were no uplift on death, one might encourage the client to use the full allowance each year.