I planned to write a blog about all the interesting tax-related announcements in the Chancellor’s Autumn Statement but, frankly, if you ignore all the forecasts (and, let’s face it, no-one knows how accurate they are) there were only three items of interest to the private client, two in the speech, and one hidden in the supporting documentation:
Accelerated payment of Capital Gains Tax. Legislation will be introduced requiring tax on Capital Gains on a residential property to be paid within 30 days of the sale (note that that’s completion, rather than the exchange of contracts, which is when the gain is actually triggered for CGT purposes). That means the treasury get their money sooner, but if the calculation of the gain is not straightforward (for instance, if you occupied the property as your main residence for part of the period of ownership, or made capital improvements like the building of an extension) you are going to need to act fast: the solicitor handling your conveyancing may not be a tax expert!
Additional Stamp Duty Land Tax on second homes. A fairly stiff 3% on top of the normal rates of SDLT will apply to the purchase of properties which are residential but not the main residence of the purchaser. The threshold for the additional charge is only £40,000 and, at the other end of the scale, grander buy-to-lets and holiday homes, because of the higher SDLT rates introduced last year already, will be hit by quite high rates: this could be a major issue for house prices in holiday home areas such as Cornwall and Norfolk. It won’t hit owners of more substantial estates of buy-to-let property as there is to be consultation on an exemption for corporate purchasers holding substantial portfolios of, say, 15 properties or more.
Buried in the “Red Book” and “Blue Book” (accompanying published data) we learn that the consultation announced in the summer budget reviewing deeds of variation, which are a very popular and useful tool for mitigating Inheritance Tax, has come to the conclusion that no changes to this concession need to be made – at least for the time being. That’s very good news.
If you are surprised by the sheer number of property-targeted additional taxes raised over the last 18 months, you shouldn’t be, if you have been a regular reader of our blogs. See our earlier blog “Is Your Property A Tax Target?”