14:44 PM, 21st February 2018, About 4 years ago 2
Capital gains tax receipts hit £5.5bn in January and leaves the Treasury on course to rake in £8.8bn this tax year. Analysis of the tax receipts by NFU Mutual, the financial advice firm, show the taxman is set to collect around £0.4bn (5%) more than in 2016-17.
HMRC usually receives a glut of Capital Gains Tax receipts in January as people fill in their self-assessment tax forms.
Sean McCann, chartered financial planner at NFU Mutual, commented: “These numbers are predicted to rise steeply with the Office of Budget Responsibility (OBR) estimating receipts will hit £9.9bn in the next tax year.
“A large chunk of these receipts will be from people selling houses and flats they’ve been renting out. In doing so, they are hammered by an extra 8% surcharge on standard rates of capital gains tax.
“The OBR forecasts show receipts increasing sharply to £13.3bn in five years’ time, which suggests that more and more buy to let investors are expected to unload properties as tax changes bite”.
Capital gains tax can be charged when assets and investments are sold or given away. For most assets such as shares, gains are taxed at 10% or 20%. Anyone selling a property that isn’t their main residence will pay 18% or 28%, depending on the size of the gain and their other income.
Sean continued: ‘’The slashing of tax relief on mortgage interest payments means that for a growing number of landlords, the figures no longer add up. Many have enjoyed rising property prices over many years and will seek to cash in, providing a tax bonanza for the Government.
“Many of our customers work in partnership with their spouse or civil partner to reduce their combined tax bills, taking advantage of each individual’s CGT allowance of £11,300, by transferring shares and property between them. However we’ve been warning our customers to watch out for potential tax traps. In some circumstances, transferring property between spouses could trigger a stamp duty charge’’
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