Shrewsbury, Abbey House 01743 285 888
Shrewsbury, Talbot House 01743 218 450
Telford 01952 297 979
Newport 01952 810 307
Many of our private clients are affected by the recent emergency budget. Apart from the increase from next year of VAT to 20% from 17.5%, major changes were announced in relation to housing benefit caps and limits and there were changes to child tax credits which are cut for those on more than £40,000 per annum. Many benefits including child benefit were frozen.
Sarah Awty Property Solicitor specialising in Property Law says:
“If you own a second home you could be affected by the rise in the capital gains tax rate when you sell the house, where you sell it at a profit. From 1988 to 2008 the rate was the individual’s upper rate of tax where the gain would push them into that band – for many that meant CGT at 40%. It went down to 18% in 2008/09 and has now risen.
For many years, the rate was 40% but it came down to only 18% in 2008/09. With effect from the budget day for higher rate tax payers, and those whose gains push them into that tax band, is now 28%. However, anyone selling shares in a business only pays 10% on the first £5m of their lifetime gains up from £2m.
The increases were not as bad as feared and those who were waiting to sell a property and were concerned about the increase may now choose to proceed with their property sales. It is important to be aware that the CGT rate is calculated by adding the gain made to the individual’s annual taxable income. So someone on £5k a year income making a £20,000 capital gain will simply pay the lower rate of tax on the gain. Someone on £20k a year who makes a £50k gain is going to pay CGT on some of that gain at 28%. Just because they are a lower rate tax payer does not mean the entirety of the gain is taxed at that level."
If you want any help or advice from us on selling your property or on the budget changes call Sarah Awty on 01743 285888 or email on firstname.lastname@example.org
Need advice? Email us email@example.com