“Overlooked changes in capital gains tax from Finance Bill 2023”

Title: Overlooked Changes in Capital Gains Tax from Finance Bill 2023


The Finance Bill of 2023 has brought about a wave of discussions and analyses centered around its major provisions. While the spotlight has primarily focused on income tax alterations and corporate tax amendments, there are several significant changes in capital gains tax (CGT) that have gone somewhat unnoticed. These overlooked changes could have substantial implications for investors, property owners, and individuals engaged in various asset transactions. In this article, we delve into some of the key but less talked-about modifications in CGT brought about by the Finance Bill 2023.

Expansion of CGT on Digital Assets
One noteworthy change that has flown under the radar is the expansion of capital gains tax to encompass digital assets. The Finance Bill 2023 has broadened the definition of assets subject to CGT to explicitly include cryptocurrencies, non-fungible tokens (NFTs), and other digital assets. This means that gains made from the sale or exchange of these assets could now be liable for capital gains tax. This extension of CGT is a clear response to the booming digital asset market and aims to ensure that these transactions are on par with traditional asset transactions in terms of taxation.

Alterations in Indexation Relief
Indexation relief, which provides a measure of inflation protection to long-term asset holders, has been subject to alteration in the Finance Bill 2023. Previously, indexation relief allowed individuals to adjust the cost of an asset for inflation when calculating their capital gains. However, the new provisions have introduced a revised method for calculating indexation relief, which could potentially result in smaller relief amounts for individuals holding assets for an extended period. This change has significant implications for those who have held onto assets for many years, potentially leading to higher CGT liabilities upon their eventual sale.

Revised Treatment of Intangible Assets
The Finance Bill 2023 has also brought about changes in the treatment of intangible assets under CGT. While tangible assets like real estate have long been a part of CGT considerations, intangible assets such as patents, copyrights, and goodwill have sometimes fallen into a gray area. The new bill provides clarity by explicitly including intangible assets within the scope of CGT. This means that gains arising from the disposal of these assets will now be subject to capital gains tax, aligning the treatment of tangible and intangible assets more closely.

Modifications to Gift Hold-Over Relief
Gift Hold-Over Relief is a provision that allows individuals to defer CGT when they gift an asset, instead of selling it. The Finance Bill 2023 has introduced changes to this relief, limiting its availability in certain cases. Under the new rules, Gift Hold-Over Relief may not be available when gifting assets to trusts or to companies in which the individual holds a substantial interest. This change aims to prevent potential misuse of the relief and ensure that transactions primarily motivated by tax considerations do not overly benefit from it.


While the Finance Bill 2023 has garnered attention for its alterations in income tax and corporate tax, the changes in capital gains tax should not be underestimated. The expansion of CGT to include digital assets, alterations in indexation relief, the revised treatment of intangible assets, and modifications to Gift Hold-Over Relief all have wide-ranging implications for various taxpayers. It’s essential for investors, property owners, and anyone engaged in asset transactions to be aware of these often-overlooked changes to ensure proper tax compliance and strategic financial planning.

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