March 29, 2023
by  Josh Sab

Preparing for the 2022/23 Tax Year End: Capital Gains and Dividend Allowance Changes

The approaching 2022/23 tax year end means that businesses need to start preparing their finances and making arrangements to keep their taxes as low as possible. However, there is a major change on the horizon for the 2023/24 tax year - a reduction in the Capital Gains Allowance. During the current tax year, the Capital Gains Tax allowance is £12,300, meaning that any profits made from the sale of assets up to that amount are tax-free.

However, from the 2023/24 tax year, this allowance will be reduced to £6,000, and then further to £3,000 for the 2024/25 tax year. It is crucial for businesses to utilise this allowance before the 5th of April 2023, in order to take advantage of the current tax benefits.

Capital Gains refer to the profits made from the sale or disposal of an asset, such as property, shares, or crypto assets. In addition to this change, there will also be a drop in the dividend allowance. Currently, the dividend allowance is £2,000, but this will be reduced to £1,000 for the 2023/24 tax year and halved again to £500 in 2024/25. This means that any dividends received above this amount will be subject to tax.

It is important to be aware of these changes and to plan accordingly in order to minimise tax liabilities. Seeking the advice of a qualified accountant can help ensure that all available allowances and tax benefits are maximised.

In conclusion, the reduction in the Capital Gains Allowance and dividend allowance will have a significant impact on individuals in the UK. Planning ahead and taking advantage of the current allowances before the 5th of April 2023 can help businesses keep their tax liabilities as low as possible. As always, seeking the advice of a qualified accountant is essential in navigating these changes and ensuring compliance with UK tax law.

For more information contact us at finance@pfconsult.co.uk

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