16 Nov 2020
Capital Gains Tax (CGT) – property
CGT is a tax paid on the disposal of an asset such as shares, bonds or property. Currently, when selling qualifying residential property, the tax is paid at 18% for basic rate taxpayers and 28% for higher rate taxpayers after an allowance of £12,300 in the current tax year.
We heard in July that the Chancellor Rishi Sunak was looking at this tax and it has been recently proposed that a future change could bring it in line with income tax rates raising the rate to 20% for basic rate taxpayers and 40% for high rate taxpayers.
It is important to say this hasn’t formally been announced but has been widely reported. Buy to let investors will feel further pain as it seems every year new legislation or tax changes have been brought in to negatively promote private residential ownership.
Should landlords decide to dispose of assets before a potential tax increase, then first-time buyers will certainly be ready to snap them up given the current demand.
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