Our recent Property Tax Webinar from our Tax Partner team covered property tax and VAT issues relating to whether you’re a homeowner, real estate investor, or industry professional. If you missed it, you can watch it on demand here.
The webinar took place just before the Chancellor announced his Spring Budget and some of what he announced has had an impact on what was said:
Rate of Capital Gains Tax on disposal of residential property
With effect from 6 April 2024, the higher rate of tax on the disposal of residential property will be reduced from 28% to 24%. The lower rate will remain at 18%.
It may therefore be beneficial to delay disposals until after 5 April albeit also taking into account that the capital gains tax exemption will fall to £3,000 from 6 April.
Abolition of Multiple Dwelling Relief
During the webinar, we talked about the availability of the MDR with regard to purchases of 2 or more properties in the same or a series of linked transactions. The Chancellor announced that this relief will be abolished with effect from 1 June 2024.
MDR will continue to be available for contracts exchanged on or before 6 March 2024 even if completion is after 1 June 2024 (provided there is no variation in the contract after 6 March) and will also apply to contracts which substantially perform before 1 June 2024.
Commercial rates will continue to apply to purchase of 6 or more properties and also mixed property purchases.
Abolition of Furnished Holiday Lettings Regime
The FHL regime which gave some tax advantages for landlords letting out furnished properties as short term holiday lets will be abolished with effect from April 2025.
However, there will be an ‘anti-forestalling’ rule to prevent unconditional contracts being used to obtain tax relief under the current rules. This will be introduced with effect from 6 March 2024.
If you would like to discuss anything that was covered in the webinar, or any of the changes from the Spring Budget, please speak to one of our experts. Our next session will be taking place on 22 May, please email kdoxey@hwfisher.co.uk if you would like to pre-register.
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