What Can We Expect From The Emergency Budget?
One of the most frustrating aspects about the coming Emergency Budget is that no one seems to know how badly property investors will be affected.
Aside from the rumoured change of swapping the 18% Capital Gains Tax charge for 20%, 40% and 50% income tax fees for profits made from selling property, I personally have heard little else.
Luckily whilst I was rooting around, I came across an article which highlighted 5 key areas that the budget may cover:
- Capital Gains Tax: like I mentioned above, the government is proposing swapping the 18% capital gains tax charge for one similar to that used for income tax bands. Should a property investor choose to sell a profit, any profits generated will be taxed under this new scheme.
- Private Residences Relief: in the past this enabled property owners to sell their only or main residence without incurring CGT. However, the government are supposedly tightening this definition to prevent property owners with multiple properties from swaying between which property is their main.
- VAT: if you are interested in renovating or investing in new property developments, these property types could soon be witnessing increased VAT costs.
- Capital Allowances: rumours are afoot that the government may reduce capital allowances to help cut corporation tax. The problem for property investors like me and you is this will reduce the amount we are able to recoup from property costs.
- Inheritance Tax: thankfully the threshold for this shouldn’t be changed from £325,000; however the government are planning to change the rules for nom-doms. They will now be brought under inheritance tax if they have lived in the UK for 7 out of the last 9 years, instead of 17 out of 20 years.
Hopefully, these 5 points have given you an insight into what may be coming in the next few months. We can only hope that they are not all passed…
Wendy xx
