{"id":6093261,"date":"2023-04-04T08:00:52","date_gmt":"2023-04-04T07:00:52","guid":{"rendered":"https:\/\/www.buyassociationgroup.com\/en-gb\/?p=6093261"},"modified":"2023-04-01T13:50:08","modified_gmt":"2023-04-01T12:50:08","slug":"capital-gains-tax","status":"publish","type":"post","link":"https:\/\/www.buyassociationgroup.com\/en-gb\/2023\/04\/04\/capital-gains-tax\/","title":{"rendered":"Property investors: Capital gains tax changes take effect this month"},"content":{"rendered":"

From 6th April, a new capital gains tax allowance will come into force, which could affect some property investors and landlords looking to sell their investment properties.\u00a0<\/strong><\/p>\n

Towards the end of last year, in the Chancellor’s autumn statement<\/a>, it was revealed that there would be some changes coming into effect across certain taxes, including capital gains tax.<\/p>\n

This is the tax that many people or trusts have to pay when they sell certain assets and have made a gain on them, such as a property that isn’t your main residence that has increased in value upon the sale. You are taxed on the gain you make, rather than the total value of the property.<\/p>\n

This could be payable whether you’ve inherited the property or you’ve invested in it, or even one that used to be your main residence and has increased in value since it has been an ‘additional’ property, for example, or one that is used for business purposes.<\/p>\n

If you own the property jointly, you must pay capital gains tax on your share of the gain. There are also certain tax reliefs you can claim, too. You can find the full criteria on the government’s website<\/a>.<\/p>\n

How is capital gains tax changing?<\/h4>\n

One of the biggest changes to capital gains tax that is about to come into play is the decrease of the tax-free allowance. Currently, the annual allowance is \u00a312,300, so you only pay tax on any gains above this amount.<\/p>\n

From 6th April, this is reducing to \u00a36,000, meaning this is the maximum amount you will be able to receive as a capital gain per year before you start having to pay tax on it. This allowance will then further decrease to \u00a33,000 from April 2024.<\/p>\n

It is estimated that around 500,000 individuals and trusts will be affected by this change this year, while around 570,000 could be impacted by it next year. By 2024\/2025, according to government figures, an additional 260,000 people could be liable for capital gains tax due to the changes.<\/p>\n

Another change, which could affect some investors, is that you will be able to transfer the property to your spouse, if you are separated, within three years of the separation, without having to pay capital gains tax. The current time frame is one year, so this could be beneficial in some circumstances.<\/p>\n

At the moment, the rates are not set to be changed. The current rate of tax is 28% on any capital gains made through divesting a property, and 20% on any other chargeable assets.<\/p>\n

Reactions from the property industry<\/h4>\n

According to one survey of UK landlords from Finbri<\/a>, 44.96% of respondents were concerned about the possible impact the capital gains tax changes could have on their property investments. It could mean that, when selling a property, profits will now be lower.<\/p>\n

However, it seems the strong rental market<\/a> and housing market resilience are buoying investors in spite of this, with 44.66% still saying now was a good time to invest in UK property. A further 45.15% said they plan to invest in more property this year.<\/p>\n

Finbri’s Stephen Clark said: “The new CGT rate, coupled with other tax changes that have been introduced in recent years such as the restriction on mortgage interest relief and stamp duty increases, will significantly impact profitability for landlords and investors when they come to sell their properties.<\/p>\n

\u201cThe private rental market is vital in the broader UK housing market. It provides accommodation for those unable to get on the property ladder and landlords with an income. But with increasing rates and the looming impact of CGT rates changing, landlords are under significant pressure, with many looking to leave the market altogether.”<\/p><\/blockquote>\n","protected":false},"excerpt":{"rendered":"

From 6th April, a new capital gains tax allowance will come into force, which could affect some property investors and landlords looking to sell their investment properties.\u00a0 Towards the end of last year, in the Chancellor’s autumn statement, it was revealed that there would be some changes coming into effect across certain taxes, including capital… Read more »<\/a><\/p>\n","protected":false},"author":1069,"featured_media":4424,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[59,2,4],"tags":[402,544],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6093261"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/1069"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=6093261"}],"version-history":[{"count":5,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6093261\/revisions"}],"predecessor-version":[{"id":6093310,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/6093261\/revisions\/6093310"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/4424"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=6093261"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=6093261"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=6093261"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}