Capital Gains Tax – Yep more changes
Capital Gains Tax also known as (CGT) is a tax on the gain you make when you sell or dispose of an asset that has increased in its value.
Generally, UK taxpayers pay CGT on all manner of assets. In relation to property tax changes, it includes the following:
- a property that has not been used as your main home
- a property that is a holiday home.
- A property which is Let.
- a property that is inherited and not used as the main home
According to the legislation introduced on the 1 April 2020, you now only have 30 days grace to declare the sale to HMRC. If this deadline is missed, HMRC is very likely to issue a penalty which will include interest on what is owed in tax.
Cuts to Stamp Duty for some
The chancellor is supporting those who wish to buy a home rather than renting. Stamp Duty will be reduced for homebuyers but will remain the same for those looking to invest in a buy to let property or a second home. This change came into effect on 8 July 2020 and will remain in legislation until 31 March 2021 in order to stimulate the failing economy.
Good news for those buying a home, the Stamp Duty rate will now be cut to zero for properties valued up to £500,000. However, not good news for all as this does not benefit those looking to purchase a second home. Those wishing to buy a holiday retreat will still have to pay the additional 3% surcharge.
Author: Amanda Goldsmith
Date: 11th of August 2020