CGT and Exit tax speculation

[Corola]

Target 25 percent by budget 2029

With three more Budgets to deliver in this Government, and assuming the same trajectory of cuts:

Budget	CGT	Exit tax
2025	33%	41%
2026	33%	38%
2027	31%	35%
2028	29%	32%
2029	27%	29%
2030	25%	26%

A nice round number to land on, with exit tax at a slightly higher rate to account for gross roll-up.

 

[Zion2022]

trajectory of cuts:

I would assume it’s very dangerous to present a roadmap, or even an expectation of future CGT rate cuts due to the distorting effects it will have on behaviour (and therefore short term revenue?)

 

[Protocol]

Correct me if I'm wrong, but I assumed the cuts to LAET / exit tax is to bring them back closer to DIRT?

Wasn't exit tax originally DIRT +3%?

DIRT is currently 33%.

 

[Fortune]

Wasn't exit tax originally DIRT +3%?

Standard rate tax +3%

 

[Corola]

Strictly speaking yes, but DIRT was also 20% and exit tax functionally moved in line with DIRT +3% until they were both raised to 41% in 2014.

That doesn't mean it should maintain a link to DIRT now. The Roadmap presents a rate option relative to CGT.

 

[joe sod]

nice round number to land on, with exit tax at a slightly higher rate to account for gross roll-up.

I thought simon harris said that deemed disposal was going to be abolished in the lifetime of this government, is exit tax and deemed disposal not inextricably linked, without one there is no point in the other?
Presumably the only reason they labeled it "exit tax" was to distinguish it from the deemed disposal where you were not exiting the investment but they were forcing you to pay tax as if you were. Therefore exit meant you were actually disposing of it?

 

[Corola]

Exit tax existed before deemed disposal, I imagine for life assurance policies (and other investment funds not traded on the stock exchange) it will continue after deemed disposal is removed. The benefit for them is that they don't need to know if you've used your CGT exemption or other gains/losses to calculate the tax due when you sell/exit your policy.

Whether ETFs will continue to come under exit tax, or will move to CGT, I don't know. Since ETFs are already self-assessed it could just mean you need to file a Form 12 or CG1 instead of Form 11.

 

[Fortune]

, is exit tax and deemed disposal not inextricably linked, without one there is no point in the other?

No. Exit tax existed a few years before deemed disposal was tacked on.