Capital Gains Tax 2023 is an important topic to understand, and many of our clients have asked for more information. The Chancellor announced the following measure affecting Capital Gains Tax in his Spring 2023 Budget.

Capital Gains Tax 2023:

Completion of unconditional contracts

From April 2023:

• Certain time limits will be extended where there has been a transfer under an unconditional contract that completes after the end of the tax period of the disposal.

These provisions will apply:

• To disposals from 1 April for Companies where the asset is transferred at least a year after the accounting period in which the disposal is taxed.
• From 6 April for individuals where the asset is transferred at least six months after the tax year in which the disposal is taxed.

The following time limits will be extended to reference the period the transfer of the asset falls in, rather than the tax point of the disposal:

• Notifying HMRC of chargeability.
• The raising of assessments and making claims.

Capital Gains Tax 2023: 

Share or securities exchanges

From 17 November 2022:

• Anti-avoidance provisions can deem shares in a non-UK company that are acquired in exchange for shares in a UK close company to be located in the UK.

This will affect:

• Individuals who have a holding of at least 5% in a UK close company.
• The non-UK company would be close if it were located in the UK.
• This will also affect further share exchanges affecting those shares deemed to be UK situs.

As the non-UK shares are deemed to be UK shares, income and gains arising from them will be taxed on the arising basis of taxation.

An election is available to opt out of the share exchange rules which will prevent these anti-avoidance provisions from applying.

Capital Gains Tax 2023:

Limited Liability Partnerships (LLPs) and Scottish partnerships disposing of joint interests in land

From 6 April 2023:

• Rollover Relief and Private Residence Relief will be available for Limited Liability Partnerships and Scottish Partnerships as it would be if the land was held by the individual partners.

Capital Gains Tax 2023:

Transfer of assets between spouses and civil partners in the process of separating

From 6 April 2023:

• Separating spouses or civil partners be given up to three years after the year they cease to live together in which to make no gain/no loss transfers.
• No gain/no loss treatment will also apply to assets that separating spouses or civil partners transfer between themselves as part of a formal divorce agreement.
• A spouse or civil partner who retains an interest in the former matrimonial home be given an option to claim Private Residence Relief (PRR) when it is sold.
• Individuals who have transferred their interest in the former matrimonial home to their ex-spouse or civil partner and are entitled to receive a percentage of the proceeds when that home is eventually sold, be able to apply the same tax treatment to those proceeds when received that applied when they transferred their original interest in the home to their ex-spouse or civil partner.

Capital Gains Tax 2023:

Taxation of the Lump Sum Exit Scheme payments

From 6 April 2022:

• Legislation will be included in Spring Finance Bill 2023 to provide that payments received under the Lump Sum Exit Scheme (LSES) which relate to an eligible claim are neither receipts of a trade nor miscellaneous income.
• This will allow the payments to be treated as the proceeds from the disposal of a chargeable asset, as is currently the case when Basic Payment Scheme entitlements are disposed of.
• In the case of a company receiving LSES payments, the payments will be treated as the proceeds from the disposal of an intangible asset.
• Payments, where the eligibility criteria are not met, will continue to be treated as receipts of a trade or as miscellaneous income.

If you need to discuss Capital Gains Tax in more detail, speak to the Robinsons Team