It has been reported today by Property Industry Eye that Kate Barker, formerly of the Bank of England, has made a bold statement within her upcoming book release. Her feeling is that capital gains tax should be charged not just on investment property and second homes, but also private home sales.
Essentially, CGT is a tax which is imposed on the profit when you dispose of an investment property. Tax is usually imposed at a rate of 28% or 18% on the profit arising, and these rate differences are dependent on your taxable income as reported on your self assessment tax return.
How Kate Barker’s suggestions would work in reality remain to be seen, and another consideration would be how this would affect those employees benefiting from more favourable PPR rules, when living in tied-accommodation provided by their employers. One example here being Church of England ministers of religion owning a property whilst living in Church provided accommodation.
HMRC have landlords firmly in their sights, not just with the Let Property Campaign, but have also attacked the CGT system in recent times. One example being the PPR final period exemption being restricted from 36 months to 18 months.
As specialist landlord and property tax advisers, here at RITA, we shall ensure that any new developments are reported on our blog.
But should you have any concerns regarding your capital gains tax position, please do not hesitate to contact us.