Capital Gains Tax SET TO RISE from April 2023... Yet ANOTHER TAX HIKE on LANDLORDS 💰
#CAVENDISHEXPERTS in Lettings, Sales and Property Management in Nottingham | Cavendish Residential | One Fletcher Gate NG1 1QS | 0115 941 0656 | www.cavendishproperty.co.uk
Chancellor Jeremy Hunt announced in his Autumn Statement in 2022 that the current Capital Gains Tax allowance of £12,300 is being halved to £6,000 from April 2023, and then cut again to £3,000 from April 2024.
That will mean an increased tax bill for many property owners planning to sell in 2023
Okay, let's start from the beginning...
💠 What is Capital Gains Tax (CGT), how much is it and when do you have to pay it?
➡ If you have a second home, and sell it - broadly, you pay tax on difference between how much you bought and sold for - this is called CGT
💠 Current rates
➡ 18% for Basic Rate Taxpayers (BRT)
➡ 28% for Higher Rate Taxpayers (HRT)
➡ Annual allowance is £12,300 (on which no CGT would be paid)
➡ Annual allowance from April 2023 will be £6,000 (on which no CGT would be paid)
💠 How does this specifically affect property owners i.e. how much extra will they pay?
➡ Average capital gain £126,711
➡ (click the underlined values for full HPI reports from February 2013 and 2023 respectively):
➡ BRT today would pay £20,593.98
➡ BRT from April 2023 would pay £21,727.98
➡ HRT today would pay £32,035.08
➡ HRT from April 2023 would pay £33,799.08
💠 When is the payment due?
➡ 60-day reporting: The requirement is for UK residents to report and pay CGT within 60 days of the capital gain i.e. the completion of the house sale
In summary, anyone looking to sell a second home in 2023 is advised to speak to our Expert Team today - we will put you in touch with the right tax advisors for the best guidance based on your specific circumstances 🦹♀️🦸♂️
💠 Talk about bad timing...
➡ All of this in a time when demand for rented housing is massively outstripping supply
➡ And when, more than ever, Landlords need the support of the Government rather than yet another tax hike
➡ And when, rising mortgage rates make home-ownership increasingly unaffordable
➡ Which all means a wider gap between supply and demand, inevitably forcing rents up for Tenants
Knowledge of the rules is particularly important when selling a Buy-to-Let property or a second home. Interested in what these changes mean for you? Get in touch, we'll put the coffee on ☕
Please note: Cavendish Residential are not authorised to give financial advice; the information and opinions provided in these articles are not intended to be financial advice and should not be relied upon when making financial decisions. Please speak to our expert team and we'll put you in touch with a specialist mortgage provider and/or Financial Advisor.
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#CAVENDISHEXPERTS in Lettings, Sales and Property Management in Nottingham | Cavendish Residential | One Fletcher Gate NG1 1QS | 0115 941 0656 | www.cavendishproperty.co.uk
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