Data from HM Revenue and Customs (HMRC) reveals that there was a 56% surge in landlords utilizing the Capital Gains Tax (CGT) on UK property service to report residential property disposals in the 2022-23 tax year, in comparison to the preceding year. This has also led to a 60% rise in the total liability for CGT on residential property disposals, amounting to £1.8 billion.
Several factors have contributed to this trend:
Tax Law Adjustments: The government has tightened tax regulations on buy-to-let properties, diminishing their appeal as an investment.
Potential Property Market Crash: The looming threat of a property market downturn could result in substantial financial setbacks for landlords.
Escalating Operational Costs: With the rise in expenses like energy bills and maintenance, it's becoming increasingly challenging for landlords to secure profits.
Landlords contemplating the sale of their properties are advised to weigh the potential ramifications of such a move. It's crucial to ensure compliance with all pertinent tax regulations.
The data suggests that the government's strategies to temper the buy-to-let market are yielding the intended outcomes. However, it's uncertain if this trend of landlords divesting from their properties will persist.
Until next time ...
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If anything I've written in this blog post resonates with you and you'd like to discover more about the taxation of UK rental properties, it may be a great idea to give me a call on 01908 774323 and let's see how I can help.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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