MORE TIME TO REPORT AND PAY CGT ON RESIDENTIAL PROPERTY DISPOSAL & NEW RESIDENTIAL DEVELOPER TAX

Many were expecting substantial changes to capital gains tax in the Autumn Budget, particularly as the Office of Tax Simplification (OTS) had suggested that CGT rates should be aligned with income tax rates.

The government have however taken on board the OTS recommendation that the 30-day reporting and payment deadline should be increased to 60 days. This will be a welcomed change for property owners and their tax agents. It will affect residential property disposals that complete on or after 27th October 2021.

Entrepreneurs will be relieved that CGT Business Asset Disposal Relief continues resulting in a 10% CGT rate on the first £1million of lifetime gains.

From 1st April 2022, the government will introduce a new tax on company profits derived from larger UK residential property developers. The tax will be charged at 4% on profits exceeding an annual allowance of £25 million and will be included in the corporation tax returns of those companies liable to the new tax.