Second home owners, landlords and property investors are being urged to beware a “dramatic change” to the current capital gains tax regime which will come into effect in April next year.
The new rules mean that anyone selling a property after April 6 2020 where Capital Gains Tax is due will have to pay the tax on any gain within 30 days of completion – a significant change on the current position.
Hilesh Chavda, a legal tax specialist in Royds Withy King’s Private Wealth team, is urging owners of more than one property to carefully consider the impact that this might have.
He says: “At the moment, the CGT deadline is January 31 following the end of the year in which the sale was made which, in some cases, could be as long as 22 months. Where CGT is due, the change could mean that sellers have to get funds in place to cover the CGT liability before the sale is completed as 30 days is not very long at all. This could be a particular issue where there are large historic gains.”
Chavda adds: “Landlords, investors and second home owners thinking of selling one or more properties in the next couple of years are well advised to get professional advice at an early stage to make sure they understand and can meet their liabilities. This will no doubt impact cash flow so it will be interesting to see what effect this has on the residential property market.
“This is particularly true where sellers are also buying and have to pay Stamp Duty Land Tax within 30 days of competition. Many may well be tempted to offload any surplus or underperforming properties in advance of April but whether they can do this successfully or not in today’s supressed market remains to be seen.”
This change will not affect sales of people’s principal home where no CGT is due.
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More government stealing our hard earned money. Tax on what we earn what we buy what we sell what we eat what we wear and finally when we die.
No change there then!
It's just licensed greed.
Yet another nail in the BTL coffin
BS AL!
Yup! And this government has not been giving value for money for years! i'd say time they were turfed out except that Corbyn and his gang are worse!
Never had one that did give value for money. No change there then!
Earlier you say that CGT will have to be paid within 30 days of completion yet later you advise to “to cover the CGT liability before the sale is completed as 30 days is not very long”. When the sale is completed you should then have the monies from sale which cover the CGT or are you thinking that people will sell without receiving any money.
In any event it’s the government getting the money sooner rather than later.
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