Change beginning.......

I sat down to enjoy beans on toast for my lunch yesterday, and watched Rachel Reeves address the Labour Party Conference.

Later in the day I asked ChatGPT to answer this question:

"What is the likely future for Capital Gains Tax under the new Labour Government?"

And ChatGPT told me this:

"The future of Capital Gains Tax (CGT) under a potential Labour government in the UK has been a topic of speculation. Labour has signaled interest in reforming tax policies to address income inequality and boost public finances, but specific details on CGT changes are not fully confirmed. However, based on statements and policy documents:

1. Alignment with Income Tax: Labour has suggested aligning CGT rates more closely with income tax rates. Currently, CGT rates (10% or 20%, depending on the asset and income) are lower than income tax rates. A change would likely see higher earners paying significantly more on capital gains.

2. Reduction of Allowances: Labour could consider reducing the annual CGT allowance (currently £6,000 for individuals in 2023-24). A reduction would mean more people paying CGT on gains from investments, property, or other assets.

3. Focus on Wealth Redistribution: Labour has consistently emphasized the need for fairer taxation of wealth. Any reform to CGT is likely to be in line with their broader approach to make wealthier individuals contribute more to public services and welfare.

4. Tax on Property and Investment Gains: Labour may target property gains, especially for buy-to-let investors or second homeowners, by increasing CGT rates in this area.

   
   

While no concrete proposals have been laid out yet, it is expected that a Labour government would take steps to increase CGT, particularly for higher earners, as part of their broader agenda on wealth taxation and redistribution.

Let me know if you'd like more updates as Labour releases specific policies on this!"

I'm going to be glued to my TV on Budget Day, because I feel that the proposed CGT changes could have a huge impact on the dental market:

• Exit plans delayed considerably because of the impact of taxation on sale for the vendor;

• An acceleration of the noticeable trend amongst first-time Owners, towards private squats and away from acquisitions;

• A brake on the growth of smaller dental groups;

• A full stop on the growth of larger dental groups;

• The growing importance of learning how to build a self-managing Golden Goose.

I'm already planning to focus my 4th quarter client workshops (and 1st quarter 2025) on how best to navigate what is likely to be the biggest shake up in the tax system for more than a decade.

I'll be looking at the navigational changes dental practices will have to make both strategically (how, where and when do we exit - do we exit at all, or build Chris's Golden Goose?) and tactics (what changes do we need to make now in financial analysis, marketing, the patient experience and our organisational structure?).

It's going to be a very busy 6 months. Budget Day will be a big one.

There may be more beans on toast ahead.