Chancellor Jeremy Hunt announced in the Spring Budget that higher property capital gains tax will be reduced from 28% to 24% , which he hopes will increase revenues caused by more transactions taking place.
The basic rate for property capital gains tax remains at 18%. Basic or higher rate for taxpayers is determined based on income tax bracket, with basic rate taxpayers at 20% and higher or additional rate tax payers at 40% and 45%.
In the document accompanying the Spring Budget, published today (6 March), it stated: “This will encourage landlords and second home-owners to sell their properties, making more available for a variety of buyers including those looking to get on the housing ladder for the first time, while also raising revenue over the forecast period.
“Private Residence Relief will remain in place, meaning the vast majority of residential property disposals will pay no CGT.”
Justin Corliss, techincal manager at Royal London, added: “The reduction in the higher rate of CGT for residential property disposals from 28% to 24% will be welcomed by those impacted. However, with no change to the scheduled reduction in the CGT exempt amount from £6,000 to £3,000 from 6 April 2024, the impact of this measure will be somewhat diluted.”
