Whilst some changes to property tax – like the extension to the Stamp Duty holiday – make headlines, others escape attention. Here’s a summary of changes to the rules on property disposals you might not have heard about.
Since April 2020, any Capital Gains Tax due on the sale of residential property must be paid within 30 days. We have seen a number of cases recently where vendors have not been made aware of the requirement by their solicitors or agents.
Financial gains made on the disposals of residential property will usually trigger liability for a capital gains tax (CGT). The exception to this rule is when you dispose of your main home, thanks to principal private residence relief (PRR).
Commercial property is an important asset class to consider as a way of spreading or diversifying risk in a portfolio. Generally, property isn’t highly correlated to other assets classes such as cash, fixed income (bonds and gilts) and equities. If you would like to know more, RfM can provide an introduction to a specialist in commercial property investments.
Entrepreneurs’ Relief (ER) can provide a valuable relief from tax on capital gains. But, as with everything in the world of tax, there are rules that must be followed to make sure you really do qualify for the lower rate of tax.