The Government has asked the Office of Tax Simplification to review Capital Gains Tax (CGT). Changes are likely to be announced in the Chancellor’s autumn statement and may see CGT and income tax rates aligned.
That will have a significant impact for property investors, second homeowners, shareholders, entrepreneurs and family trusts, says accountants, business and financial advisers Kreston Reeves
Jo White, a tax advisory director at Kreston Reeves, explained: “The Government has made historic levels of spending into the UK economy to help businesses and individuals through the coronavirus pandemic. We know that a review of taxation was likely to follow and Capital Gains Tax, much overlooked in recent years, is an obvious and easy place for government to start.
“Buy to let investors with portfolios held personally or in corporate structures will feel these changes if they look to sell parts of their portfolio or shares in the company that holds property. Property investors have been the target of many recent tax changes and may feel unfairly targeted at a time when they are facing Covid-related rent holidays from tenants.
“Individuals with a holiday or second home could face, if they are an additional rate taxpayer, a CGT rate of 45% on any gain from the sale of property and will have just 30 days to settle any liability.”