On 16th March 2016, Chancellor George Osborne presented his eighth Budget. In a speech lasting just over an hour, he boldly went through a long series of measures and announcements at warp speed. This Tory star was fleet of foot as he stressed how strong the UK economy is whilst pointing out how vulnerable it is to the storms raging in the rest of the world. He beamed as he seemed to defy gravity by pointing out the fact that whilst the deficit is a higher proportion of GDP than expected, it is also actually less than we had thought. He took the opportunity to plug his belief in the benefits of remaining in a 'Federation' and he told the Scots that "ye cannae change the laws of economics". Speaking with vulcanic (sic) force, he dedicated his Budget to the Next Generation and promised that Enterprise would get us there.
Recently, Osborne's policies have been viewed as somewhat 'warped' by many property investors, leaving us all wondering, as he boldly goes on this economic trek, will it be a triumph of enterprise or will it, like Star Trek, prove to be nothing more than fantasy?
Capital Gains Tax ('CGT')
The latest blow to residential property investors came in the form of some good news - for everyone else!
The main rates of CGT are to be reduced from 6/4/2016 to:
- 10% (to the extent that the taxpayer's basic rate band is available), and
- 20% for higher rate taxpayers (or once the taxpayer's basic rate band has been exhausted).
However, the previous rates of 18% and 28% (respectively) will continue to apply to gains arising on disposals of residential property.