The change in the capital gains tax rules has entered into force …
As recently as last week, the Association of Accounting Technicians expressed concern about the old 30-day limit.
In order for accountants to undertake this work on behalf of a client, they need specific authorization from their client, which must be obtained by using an agent services account and sending authorization links via email. customers to create a Government Gateway account.
As a result, AAT members have expressed concerns about both the incredibly tight deadline for declaring any CGT liability and a widespread lack of awareness among those who sell residential property.
Last week, Ann White, director of Abacus Accountancy and Payroll Services, backed the ATT case by saying, “HMRC hasn’t given it enough thought. I see they want to put money in the coffers more early, which is not necessarily a problem, but a 30 day window is not very long between the completion of a property and the assessment of the gain.
“The majority of the lawyers I have dealt with also did not know that this requirement was now in place, and neither did many of my clients, which made them panic and, in some cases, having to pay a fine. It is also a lengthy process for accountants to obtain authorization for clients to do so. “
However, the absence of a more fundamental reform of the CGT in the budget was hailed by Richard Davies, head of leasing at the London agency Chestertons.
He said: “We welcome the Chancellor’s decision not to increase the capital gains tax. The tax hike could have been the final tipping point for homeowners to sell their portfolio. The avalanche effect of this would have resulted in a subsequent decline in rental properties at a time when UK tenants already face a shortage of suitable housing within their budget. “
But his colleague Guy Gittins – Managing Director of Chestertons – is disappointed with the lack of reform of inheritance tax. “We would have liked the Chancellor to increase the zero rate bracket from her current rate of £ 325,000 as it has been in place since the 2009/10 tax year.
“Inheritance tax has, in real terms, increased since then as average UK house prices have increased by 70%. Since for most people the bulk of their inheritance is the property they live in rather than an investment, this seems like an unfair burden. “
Meanwhile, Jackson-Stops chief executive Nick Leeming has expressed disappointment at the lack of stamp duty reform.
“SDLT vacations have been incredibly effective in supporting the market during a difficult 18 month period. As Britons place a renewed emphasis on their homes, factors other than a financial economy are at play and buyers are acting with intention. According to our research, there are now 25 buyers looking for every available property, as buyers reassess how their home contributes to their changing lifestyle aspirations.
“It’s disappointing that we haven’t seen other long-term measures put in place to support the housing market – taxation is one of the biggest hurdles facing property buyers and further reform would encourage fluidity throughout the purchasing lifecycle.
“Finally, it also helps maintain the thousands of jobs that depend on the real estate market, including artisans, moving companies and white goods suppliers, and supports a thriving real estate market for years to come.”