Tax Planning
Navigating the New CGT Regime: Practical Planning for UK Individuals
With recent increases to Capital Gains Tax and upcoming reforms to carried interest, individuals need to reassess their investment timing and structure for optimal tax outcomes.
By NomadicTax Research Team • 6 min read • November 21, 2025
## What’s Changed
The Autumn Budget (announced 26 November 2025) introduced several major reforms to **Capital Gains Tax (CGT)**:
- For lower-rate taxpayers, CGT increased from **10% to 18%**, aligning with residential property rates. ([gov.uk](https://www.gov.uk/government/news/chancellor-chooses-a-budget-to-rebuild-britain?utm_source=openai))
- Higher-rate payers now face **24%** for non-property gains. ([gov.uk](https://www.gov.uk/government/news/chancellor-chooses-a-budget-to-rebuild-britain?utm_source=openai))
- The tax treatment of **carried interest** will change: from April 2026 it will be taxed as **Income Tax**, with Class 4 National Insurance Contributions applying, and the new regime will feature a 72.5% multiplier for qualifying carried interest. ([gov.uk](https://www.gov.uk/government/calls-for-evidence/the-tax-treatment-of-carried-interest-call-for-evidence/outcome/the-tax-treatment-of-carried-interest-government-response-and-policy-update-june-2025-accessible?utm_source=openai))
## Planning Strategies
Here’s how individuals can adapt:
- **Time your disposals**: If you’re planning a CGT event, doing it **before April 2026** may offer lower rates. For very large gains, accelerating the sale may justify seeking earlier completion.
- **Use allowances and exemptions**:
- Everyone gets an **Annual Exempt Amount** for CGT — ensure you fully utilise this each year.
- Consider gains disposals spread across tax years where your income is lower.
- **Structure carried interest carefully**: For fund managers, consider whether carried interest can qualify under the new regime, especially in view of the multiplier and compliance requirements. Legal and tax structuring now matters more than ever.
- **Invest in “main residence” relief**, business asset disposal relief (BADR), or other reliefs before changes take effect. For example, BADR stays at 10%, then moves to 14% April 2025, then to 18% thereafter. ([gov.uk](https://www.gov.uk/government/news/chancellor-chooses-a-budget-to-rebuild-britain?utm_source=openai))
## Examples
- Jane sells shares worth £100,000 in 2024-25; being a lower-rate taxpayer, she previously would pay 10% CGT (£10,000). Under the new rules, after 6 April 2025, she would be liable at **18%**, costing her £18,000 — a difference of **£8,000**.
- A fund manager earning carried interest, under current rules taxed as capital gains in some cases, will from April 2026 see this taxed instead under **Income Tax and NICs**, increasing total tax burden substantially depending on their marginal bracket.
## Actionable Insights
- Review your portfolio now and identify potential gains that could be realised **before the April 2026 changes**.
- Talk to your tax advisors about **pre-planning carried interest structuring**, especially if you have arrangements rounding into the current CGT framework.
- Stay alert to reliefs like BADR, lifetime limits, and ensure you've documented qualifying disposals before the thresholds change.
**Bottom line**: The UK’s tax landscape is shifting — particularly for investors, fund managers, and business owners. Proactive timing, smart use of reliefs, and strategic structuring will be key in navigating these changes.