‘Damp squib Budget will be remembered as a Chancellor signing his party’s death warrant’ is how the Daily Mirror reported events in Parliament on Wednesday
There’s three take-outs for property investors:
First: two years after the Government’s Multiple Dwelling Relief (MDR) review the Chancellor removed MDR, from June 2024. It means that, for transactions of 2-5 properties, where the vendor is the same, then each transaction is treated as linked, regardless of time between them, which means there’s full SDLT to pay on each property
Interestingly, it looks like 6 or more properties may still opt for the non-residential rate of Stamp Duty Land Tax (SDLT)
Second: removal of the Furnished Holiday Lettings (FHL) tax regime from April 2025 means you are no longer able to treat your property business as an FHL, and all those tax benefits will be gone
In its 2022 Property Income review the Office of Tax Simplification (OTS) considered that, if the FHL regime was abolished, a statutory ‘Brightline’ test may be required to define when a property trading business is carried on
A ‘Brightline’ test would also be helpful for Inheritance Tax (IHT) purposes and might reduce the number of Business Property related disputes
Third: Capital Gains Tax (CGT) on disposal of residential property is reduced from 28% to 24%
A headline rate lower than 25% may encourage owners to dispose of properties, but it has no regard for renters, and at a time when there’s already a shortage of rental stock?
The reality we are facing as a nation is a 5 tough years, whatever the colour of Government
If you’re within shouting distance of your right mind, you’ll already know it’s time to tax plan your future..
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