A leading tax expert is forecasting that Chancellor Rishi Sunak will duck making any changes to CGT in tomorrow’s Budget and will instead wait until the autumn.
When the changes do happen, they are expected to target buy to let and other additional homes even harder than now.
Nimesh Shah, chief executive of tax advisory firm Blick Rothenberg, says controversial changes are likely to be ducked by Sunak tomorrow, when the limelight is on him, as he does not want to be unpopular given his higher political ambitions.
On CGT Shah believes it is too soon for Chancellor to align rates with income tax, as proposed by the Office for Tax Simplification in a report commissioned by Sunak himself last year.
But Shah believes it will happen eventually, possibly in the autumn. “It wouldn’t fit with a Budget that will primarily be about the extension of support. What he says will be more important than what he does because it will signal what may come later in the year.”
Shah was contributing to a Knight Frank statement ahead of tomorrow’s Budget: another contributor - Matthew Braithwaite, a partner at law firm Wedlake Bell - agrees.
Braithwaite agrees on the timing of a CGT rise and says any sense of urgency among his clients to dispose of property has receded in recent weeks as speculation around an imminent change has died down.
“Along with a wealth tax and inheritance tax I suspect that will be put in the ‘too difficult’ box at this Budget” he says. “More subtle tax changes are likely. For example, it’s not beyond the bounds of possibility that ATED will be increased.”
The fact that CGT rules are tied so closely to inheritance tax means a more extensive reform of both was possible in future, Braithwaite adds.