Key Tax Changes You Need to Know in 2025

Personal Taxes

Capital Gains Tax (CGT) Increase

Capital Gains Tax (CGT) applies to profits from selling assets like investments or valuable possessions.

Following the Autumn Budget, CGT has increased with immediate effect:

• Basic rate taxpayers: 10% —>18%

• Higher & additional rate taxpayers: 20% —>24%

Tip: Capital losses can offset capital gains, so keep records when selling taxable assets.

Frozen Tax Thresholds Leading to Higher Tax Liabilities

Several tax thresholds remain frozen, increasing overall tax burdens over time:

• Personal allowance: Frozen at £12,570.

• National Insurance threshold: No change.

• Inheritance Tax (IHT) Inheritance: Stays at £325,000 until 2030.

• Property IHT allowance: Fixed at £175,000.

• Annual gift allowance: Remains at £3,000.

Major Change from April 2027 - Pensions will be included in taxable estates, potentially increasing inheritance tax liabilities.

Stamp Duty Changes from April 2025

Stamp duty thresholds in England and Northern Ireland will decrease from 1 April 2025, affecting property buyers:

• Primary residence stamp duty threshold drops from £250,000 to £125,000.

• First-time buyer relief decreases from £425,000 to £300,000.

• Buy-to-let and second home surcharge increased from 3% to 5% (already in effect since 30 October 2024).

These changes end the temporary relief introduced in September 2022, meaning more property buyers will pay stamp duty on a larger portion of their purchase price.

Council Tax Increases from April 2025

• Local authorities in England can increase council tax by up to 5%.

• The average Band D council tax for 2024/25 was £2,171, meaning a potential increase of £109 per year.

Plan Ahead for Rising Tax Liabilities

With CGT increases, frozen thresholds, and rising property-related taxes, it’s crucial to plan ahead and manage your tax obligations effectively.