Potential Budget CGT Relief For Sales To Long-Term Tenants
Will this 'good landlord' proposal make it into the Budget?
POSTED BY HELEN BEAUMONT ON 19/10/2018 @ 8:00AM
The Sunday Times has reported that the Government may be considering a CGT relief incentive to landlords for selling to their long-term tenants in the next budget on 29th October ...
A potential CGT relief may be included in the Chancellor's next budget!
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In the article, the Sunday Times writer said, "Under plans that have found favour in Downing Street, landlords would not pay capital gains tax when selling to tenants who have lived in a property for three years or more.
The plan is designed to spur landlords to offer longer tenancies and then to sell to a new generation of homeowners. Conservatives say a proposal from think tank Onward is under consideration for inclusion in the Budget".
This may be good news for landlords who are looking to exit the property market, however, it may not be as good a tax break as it first sounds with the proposal for the profit to be split equally between them and the tenant.
The proposals states that:
Existing buy-to-let properties would be eligible for 100% capital gains tax relief if the property is sold to a sitting tenant who has lived there for 3 years or more.
The gain from this tax relief would be split evenly between the landlord and the tenant, giving the landlord a windfall when they sell and the tenant thousands of pounds towards their mortgage deposit.
Onward proposes that the Treasury should pay for this policy by tightening other tax reliefs for buy-to-let investors, including reducing the Private Residence Relief period from 18 months to 6 months and abolishing Lettings Relief of up to £40,000.
The government has already introduced some measures to address a cooling housing market such as SDLT relief for first-time buyers and the Help-to-Buy scheme.
However, we will have to wait and see whether this 'good landlord' proposal will actually make it into the Chancellor's statement later this month.
"Would you like to know more?"
If you'd like to find out more about this potential CGT relief then do give me a call on 01908 774323 or click here to ping me an email and let's see how I can help you.
Until next time ...
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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.
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