The UK chancellor of the Exchequer has presented his autumn budget and spending review leaving the vast majority of personal taxes and allowances untouched.
Many expected changes to the inheritance tax and pensions regimes, but hardly any mention of those was made during Rishi Sunak’s announcement or in the Treasury documents.
One change, however, will affect how long people have to report and pay capital gains tax (CGT) after selling a residential property in the UK.
CGT for these types of assets ranges between 18% and 28% depending on the rate band, and sellers have, until now, needed to inform HM Revenue & Customs about the sale and pay any tax on capital gains within 30 days of completion.
But under the revised rules, UK residents and non-residents will have 60 days to comply with CGT rules, effective from 27 October 2021.
“This will ensure that taxpayers have sufficient time to report and pay CGT, as recommended by the Office of Tax Simplification (OTS),” the Treasury said.
“When mixed-use property is disposed of by UK residents, legislation will also clarify that the 60-day payment window will only apply to the residential element of the property gain.”
Not out of the woods yet?
Myron Jobson, personal finance campaigner at Interactive Investor, said: “The only mention on capital gains tax was in the budget document and is not what many expected.
“Proposals to increase CGT to align with income tax, made by the OTS last year, remain unrealised for now. However, the government has done little to dispel the impression that nothing is off the table to balance the books.
“That means inheritance tax, income tax and even the pension tax relief could be in the firing line among others.
“It is no secret that the government needs to raise a significant amount of money to foot the World War Two-sized bill to foot the cost of its coronavirus economic support packages.
“The reality is we will have to pay for it some way or another – either by taxes going up or by spending being cut or, most likely, a combination of both.”
