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- The United Kingdom’s Chancellor of Exchequer, Rishi Sunak, delivered the nation’s budget in the House of Commons.
- Budget quelled fears about rate hikes and reduced Capital Gains Taxes’ allowances.
- Many analysts see this as a secret attack on wealthy investors.
Cryptocurrency investors in the United Kingdom can heave a sigh of relief as their fears about certain aspects of the new budget have been removed, albeit for a short term alone.
A pleasant surprise
Several analysts and crypto enthusiasts alike had predicted that the government might consider reducing the capital gains tax (CGT) allowance in the run-up to the budget. They also feared that the government might bring about a rate hike. Though it may seem routine and insignificant, panic was caused. This was due to the drastic proportions of said measures. In a report, the rate was hiked from 20% to 40%. Especially for taxpayers who fell under the higher tax rate slab.
Speculation about decrease in CGT
There was quite a lot of speculation about a dramatic decrease in CGT. From around $17,200 to just a mere and insignificant $2,800.
However, all those predictions came well short of the actual proceedings. In a pleasant and surprising move, the Chancellor stated that the government would freeze the CGT threshold at the same levels, at $17,200. The only catch accompanying this news is that this will only be in effect until 2026. This means a higher possibility of a reduction in the CGT allowance in the 2026 budget. Moreover, the tax rate hike situation was completely omitted in the first place, leading some to speculate the origin of such predictions seriously.
Short-term relief or a secretive tax move?
Though the recent moves may provide short-term relief to crypto enthusiasts and investors alike, this may also be a secretive tax move by the government dressed up as a bounty. Long-term holders are the most affected by this freeze as they would have to carry a higher burden. Moreover, citizens who would want to build or acquire new assets, such as cryptocurrencies, will have to pay more taxes as their assets mature over the course of these five years. Nonetheless, investors are happy that their concerns during the budget’s run-up were completely unsubstantiated.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
