Hello
The Office of Tax Simplification (OTS) has launched a Capital Gains Tax (CGT) review and call for evidence. Perhaps the chancellor has his eye on reforms in this area ahead of an Autumn budget.
Looking at all the taxes, I would say that as a group of taxpayers, individual property investors have the toughest time of it when it comes to complicated interactions of taxes. Let me explain. You have Stamp Duty Land Tax (SDLT) for properties located in England and the Scottish version, Land and Buildings Transaction Tax (LBTT), or the Welsh version, Land Transaction Tax (LTT) when you make your purchase elswhere in the UK. You may also have to work through the higher rate rules that apply for residential properties. If you are collecting rents you have the ongoing restriction for tax relief on financing costs, and also the rules on replacement of furniture and repairs etc are not so easy. When you sell, you may be within CGT (with all of its accelerated new reporting deadlines) otherwise you may fall into being taxed within Income Tax thanks to the ‘profits in dealing in or developing UK land’ provisions (if you have heard of them, although ignorance of the law is no excuse!). For Inheritance Tax (IHT), things are not much easier, as there are the various nil rate bands and transferable bands to consider. Now when someone asks me 'Do I sell and spend it now or try and take it to the grave', in respect of a property porfolio, I say, 'give me a couple of weeks and I'll do the workings'.
If you have any tax-specific queries, please post them up to our sister site, details are here: www.VtaxP.co.uk. We apologise that we are asking everyone to upload their ID when they ask a question, it just seems to be the only cost-effective way of performing some of the necessary checks for anti-money laundering purposes.
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Nichola Ross Martin FCA CTA (Fellow)
Tax Director
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