No changes to Capital Gains Tax or Business Asset Disposal Relief

24th March 2021

Wilson Field give us an overview of the changes in tax outlined in the Chancellors recent budget announcement.

We didn't see the expected changes in the recent budget announcement, with no changes to either Capital Gains Tax or Business Asset Disposal Relief. It means there won't be any changes to the tax relief when going through the process of an MVL. In the months leading up to the Chancellor’s budget, changes were anticipated to both Capital Gains Tax and Business Asset Disposal Relief. However, the budget revealed on 3rd March 2021 didn’t contain these expected changes.

Why was change speculated?

In November 2020, a report from the Office of Tax Simplification (OTS) commissioned by the Chancellor suggested a Capital Gains Tax review. The proposed changes would bring the rates more in-line with income tax rates, lowering the exemption threshold from £12.5k to between £2k and £4k. The report also recommended amendments to Business Asset Disposal Relief (formerly Entrepreneurs’ Relief), refocusing it on retiring business owners.

The goal of these proposed changes was to raise an estimated £14bn for the treasury.

The changes were also expected to affect directors and companies choosing to close via a solvent liquidation or Members Voluntary Liquidation (MVL), potentially increasing the tax they’d have to pay and reducing benefits of Business Asset Disposal Relief.

What actually happened?

The budget mainly focused on measures to help businesses cope with the continued (though easing) coronavirus restrictions and included plans to rebuild the economy.

Changes in this budget included: a freeze of the threshold of Personal Allowance tax and an increase on the basic rate income tax threshold to £12,570, or £50,270 for those on a higher rate. These rates will remain frozen until 2026. Capital Gains Tax wasn’t raised, and annual exemptions were frozen until 2026.


Despite a report from the Office of Tax Simplification (OTS) suggesting changes to Capital Gains Tax and Business Asset Disposal Relief, significant alterations to both were absent when the budget was delivered on 3rd March 2021. Although the changes could have generated an estimated £14bn, the Chancellor chose to focus on rebuilding the economy through other means, and helping businesses recover from the pandemic as restrictions ease over the coming months.

To find out more about Wilson Field click here.

You might also be interested in

Forum re-launch with a new look and feel

Tue 23rd April 2024

Forum has been one of Sheffield’s most iconic venues since 1992!? 

Naylor Support Hoyland Common Primary School's Innovation Hub & MakerSpace Project

Tue 23rd April 2024

Aiden Tallant, the Head of Hoyland Common Primary School put a call out to local businesses to help sponsor the school's ambitious Innovation Hub & Makerspace Project.

The University of Sheffield is considering launching an SME Graduate Development Programme!

Mon 22nd April 2024

The University of Sheffield is considering launching a Graduate Development Programme to help SMEs develop and retain talent in the region. We would be very interested in your views on this.

Every Day is Earth Day for Highland Carbon

Fri 19th April 2024

I write with some reflections on Earth Day as it again approaches on Monday 22nd April. Earth Day is even more relevant today. The good news is that the public and companies are far more ware of environmental issues such as Climate Change.