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Haines Watts Bristol Phone icon 0117 974 2569

Figures recently published indicate that the Treasury have received a record £9.2bn in receipts of capital gains tax (CGT) in 2018.19, an increase of 18% from the year before. Some commentators believe at least some of this increase has arisen from increasing returns from landlords who are giving up their buy to let properties in the wake of recent tax changes. Now that tax relief on mortgages on buy to let properties is restricted to 20% the rate of return for taxpayers borrowing to fund the purchase of the property has fallen (both higher rate and otherwise basic rate taxpayers because of the way the rules operate).

From 6 April 2020 any capital gains tax due on the sale of a property will be payable 30 days after disposal, which will bring the tax take forward for HMRC in the future. The rate of tax is currently 18% or 28% (dependent on income) on the gain arising from sales of property, compared to 10% and 20% for other types of gains.

The government has also proposed that from 6 April 2020 the lettings relief available to landlords who used to live in a property before subsequently letting it out is to be restricted, so that it only applies in a very few circumstances. For these types of landlords it would be worth considering selling the property in 2019.20 to avoid losing the relief.

With other changes not directly related to tax, such as a stop on tenants being charged by agents and landlords for fees during the letting process, minimum epc requirements, and measures proposed to stop landlords ‘evicting tenants without good reason’ some landlords may be thinking there are easier ways to get a return on investment …HMRC will collect the increasing CGT as properties are sold on.  

 

Want to know more? Call us on 0117 974 2569 or email bristol@hwca.com

About the author

Sally Reed

Sally qualified as a Chartered Accountant in 1991. She graduated from the London School of Economics in 1985, and spent some time working in London and Launceston before deciding to study for the Chartered Accountant qualification, and trained with Nevill Hovey & Co, in Launceston. After having two children, in 1995 and 1999, Sally decided to set up her own business, which originated as a bookkeeping service, but between 1999 and 2017 grew to a general accountancy practice with 8 other staff, and two offices, one in Westgate Street in Launceston, and another in Okehampton.

Sally decided in 2017 to merge her business, Sally Reed Ltd, with Haines Watts South West LLP, in order to be able to better serve her clients going forward. Whilst Sally’s business had grown since it started, so had that of her clients and this, coupled with the expected changes in the accountancy profession in the next few years, meant that the access to specialists available from within the Haines Watts group, but with the emphasis still on providing a local service, seemed like a natural progression. Rather nicely, Haines Watts had taken over the business of Nevill Hovey & Co some 12 months earlier, and so Sally is now also working alongside staff and with clients she worked with 20 years ago!

Sally particularly enjoys spending time with clients, learning about their businesses, and getting involved. In particular Sally likes to use modern technology as much as possible to facilitate repetitive tasks, allowing Sally to look with her clients towards the future of their business, their aims and fears, and using her experience to assist business owners however possible.

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