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Residential property tax update


Private Client

A temporary reduction in Stamp Duty Land Tax (SDLT, saving up to £15,000 on new property purchases which complete between now and 31 March 2021, is welcomed after little activity this spring. Thereafter, the pre 8 July 2020 SDLT rates will be reinstated and it has been proposed that non-residents will pay a new additional 2% surcharge.


Don’t be caught out by the new 30 day reporting and settling Capital Gains Tax due on residential property disposals …  


If you dispose of a residential investment property such as a buy-to-let or furnished holiday property, your second home, or have not lived in your home throughout its entire period of ownership, the profit realised will need to be reported to HMRC and Capital Gains Tax (CGT) paid within 30 days of completion of sale.  The same rules apply if there is a deemed CGT disposal such as an outright gift of the whole (or part) of a residential property.  Partners in a partnership may also be affected by these new reporting rules, as are Trustees and Personal Representatives of Estates.


Changes to Private Residence Relief from April 2020 may result in an unexpected CGT liability on the disposal of your home, especially if it has been rented out to others during your period of ownership or part of it has been used exclusively for business purposes. 


If penalties and interest are to be avoided, time is of the essence!


Before you know you’re definitely on the move, please call Sarah Tucker on 01223 810100 to help you understand your tax position and comply with the new reporting requirements.


Are you still trying to sell your old home?


If, after January 2020, you have been unable to sell your old home within three years of purchasing a new home as a result of exceptional circumstances beyond your control, you may still be able to claim a refund of the supplementary SDLT paid.  Exceptional circumstances include Covid-19 or action taken by a public authority preventing sale; and the old home must be sold as soon as practicable for a successful application to be made.


Call Sarah Tucker for help and assistance with your SDLT refund claim.