CGT & Dividend changes - May 1st 2025

Reporting requirements for income tax are set to change over the next couple of years.

The biggest change is the rollout of Making Tax Digital for income tax self-assessment (MTD for ITSA) starting on dates from 6 April 2026 to 6 April 2028, depending on level of income.

Adjustment calculator for CGT

Some Budget announcements came too late to be incorporated into the 2024/25 tax return. The increase to capital gains tax (CGT) rates – from 10% to 18% basic rate and from 20% to 24% higher rate – applies to disposals from Budget Day, 30 October 2024. Taxpayers who have disposals taxable at the new rates and complete their return online will have to use a separate HMRC calculator to arrive at an ‘adjustment figure’.

For trustees and personal representatives, a new adjustment box will be added to the return pages and a similar calculator will be provided. 

Until then, HMRC has asked trusts and estates that have non-residential CGT disposals after 30 October 2024 to wait until the new 2024/25 return form is published in April.

More detail on dividends

For the 2025/26 tax return directors who receive dividends from close companies will have to identify the dividends received from each company, giving its name and registered number and the highest percentage of share capital held in the year. And unincorporated businesses will have to give the date of commencement or cessation, if in that tax year.