Capital Gains Tax and Voluntary National Insurance Contributions - OCTOPUS

Capital Gains Tax – Annual Exemption

The Capital Gains Tax annual exemption for individuals will reduce from its current amount of £12,300 to £6,000 from 6 April 2023.

Further, from 6 April 2024, the Capital Gains Tax annual exemption for individuals will reduce permanently from £6,000 to £3,000.

The level of proceeds at which all disposals must be reported, regardless of whether there is Capital Gains Tax payable, is fixed at £50,000.

The Capital Gains Tax annual exemption for trusts will continue to be half of that for individuals.

Capital Gains Tax – UK property

Reminder – Capital Gains Tax on most disposals of UK property must be declared to HM Revenue & Customs online within 60 days of completion.  Any Capital Gains Tax payable must also be paid with the same 60 day period.

Voluntary National Insurance Contributions

If you are a man born after 5 April 1951 or a woman born after 5 April 1953 you have until 5 April 2023 to pay voluntary contributions to make up for gaps between tax years April 2006 and April 2016 if eligible.

After 5 April 2023 individuals will only be able to pay voluntary contributions for the past 6 years.

This may not be enough to qualify for a new State Pension if you have fewer than 4 qualifying years on your National Insurance record, you usually need at least 10 qualifying years in total.

You will need a Government Gateway account to check your contributions – see https://www.gov.uk/check-national-insurance-record

Article prepared by TFO Tax.

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Frequently Asked Questions

How is the Capital Gains Tax annual exemption changing for individuals from April 2023 and 2024?

The Capital Gains Tax annual exemption for individuals is being reduced from £12,300 to £6,000 starting 6 April 2023, and will further reduce to £3,000 from 6 April 2024.

What is the current reporting threshold for Capital Gains Tax disposals, regardless of tax liability?

All disposals must be reported if the level of proceeds is £50,000 or higher, irrespective of whether any Capital Gains Tax is payable.

How does the Capital Gains Tax annual exemption for trusts compare to that for individuals?

The annual exemption for trusts is set at half the amount of the exemption for individuals.

What is the deadline for declaring and paying Capital Gains Tax on most UK property disposals?

Capital Gains Tax on most disposals of UK property must be declared and paid to HM Revenue & Customs online within 60 days of completion.

Who is eligible to pay voluntary National Insurance contributions to cover gaps from April 2006 to April 2016, and what is the relevant deadline?

Men born after 5 April 1951 and women born after 5 April 1953 were eligible to pay voluntary National Insurance contributions for gaps from April 2006 to April 2016 until the deadline of 5 April 2023.

After April 2023, how far back can individuals make voluntary National Insurance contributions?

After 5 April 2023, individuals can only pay voluntary National Insurance contributions for the previous six years.

What is the minimum number of qualifying years typically required to be eligible for a new State Pension?

At least 10 qualifying years on a National Insurance record are usually required to be eligible for a new State Pension.

How can individuals check their National Insurance contribution record?

Individuals can check their National Insurance contribution record by using a Government Gateway account accessed via the UK government website.