Changes To Stamp Duty, Capital Gains Tax and More
Leading national law firm Irwin Mitchell Private Wealth’s experts have reacted to yesterday’s Budget, which detailed plans to extend the stamp duty exemption for first-time buyers, changes to capital gains tax (CGT) exemptions and a consultation on a 1% surcharge on stamp duty land tax (SDLT) for overseas buyers.
The Chancellor of the Exchequer Phillip Hammond announced that first-time buyers purchasing shared ownership homes will be exempt from paying stamp duty on properties valued up to £500,000. The relief will also be applied retrospectively for any shared-ownership buyers since the exemption was announced in last year’s Budget.
Expert Opinion
“The continued and deepened assistance for first time buyers via SDLT is to be welcome and given the delayed nature of most of the measures announced, it is a pleasant surprise that this relief will be retrospective.
Additional funding for the housing infrastructure fund will need to be closely monitored as the supply site problems in the market are well documented and it is essential they are addressed in reality rather than just in theory.” Jeremy Raj - Partner
There were several tax changes announced including stamp duty land tax, capital gains tax and the residence nil rate band, with the promise of key consultation on tax reviews pronounced too.
Expert Opinion
“This year’s Budget has shown the devil is in the detail. The focus was on spending the windfall of the Office for Budget Responsibility (OBR)’s improved figures, meaning there were no major tax increases, restrictions on pension contributions, or income tax cuts.
“The taxpayer will be pleased to see the increased personal tax allowance to £12,500 and an increased 40% tax threshold of £50,000. This will now remain in place for two years.
“Another notable change is for CGT private residence relief. It will make the letting relief for any period the main home was let out much more restrictive and halves the final PPR exemption period (that taxpayers have in any event, if the home was at any time their main residence) from 18 months to 9. These proposals will come into effect in April 2020; after consultation.
“We eagerly await the Office for Tax Simplification’s report on its inheritance tax review, which is likely to be in two parts in November and January. Inheritance tax has become increasingly cumbersome and difficult to understand, and it is hoped their desire to ‘simplify the customer journey’ has been at the forefront of the review.
“There are also plans to announce a new consultation on taxation of trusts, though with no date in sight. After the unsuccessful attempts to ‘simplify’ and to make ‘fairer’ trust taxation in 2013/15, it’s sensible for HMRC to tread carefully here.” Nick Rucker - Partner