Impending Tax changes for Landlords Post-Covid next financial year in April
I have been sent by our accountants the last pre-Christmas “Morning Account“, a regular accountancy news-brief, this month about the potential tax implications Post-Covid from next April.
As you will sadly see all our forecasts for Capital Gains increases together with the introduction of a Wealth Tax are being openly promoted in the press now.
* Wealth tax: I am alarmed to see that it is likely to start on properties of £500,000 – and that it might be as high as 5% of gross value. As you will see from the comments from the head of Grant Thornton, it is also highly unlikely to stay at a one-off – most taxes do not as you know.
* Capital Gains Tax: I think everybody is accepting that this is going to run parallel with Top Rate Tax, relative to each individual property landlord/investor’s individual rate of tax. Whilst there is a Conservative government that is likely to stay at 45% – but do you really think the Tories will still be in power at the next election?
* Welsh introduce a ‘sales tax’: I wasn’t aware of this potential Draconian step. It would seem that the LTT(Land transition tax) which must be Wales’s equivalent of an English sales tax, is being introduced at 1% per hundred thousand pounds. Starting at property values of £160,000, this is going to rise by 1% per hundred thousand up to property values of £1.6 million i.e.16% per property sold! Horrendous!
* Just to put it into perspective, every property sold of £500K it will cost the Seller £25K; for properties of £1Mn a charge of £100K; for properties at £1.6Mn & above, he will loose £256K !!! And this will surely be the pre-cursor for Sunak to think of something similar for English property🤮!
What must surely now be perfectly evident to all our clients, readers and those that we are put in touch with, is that the buy-to-let landlord is going to be the recipient of the brunt of the chancellor’s tax reclaim for those billions of pounds he has spent on Covid.
Solution: move now, listen to us. Gresham can get your properties into a company preferably before the start of the next financial year.
Do not let yourself get into the position of being forced, either because of Banks’s mortgage restrictions or simply because of necessity, to have to sell. Or – your whole Property investment strategy will have been entirely pointless.
