CIOT calls for property sales tax change

05 Jun

The government should consider delaying changes to capital gains tax (CGT) rules in relation to residential property sales to take account of the impact of COVID-19 on the property market, according to the Chartered Institute of Taxation (CIOT).

The measure is included in the current Finance Bill, which began its committee stage in the House of Commons on 4 June.

Private Residence Relief (PRR) enables most owner occupiers to sell their properties without being liable for CGT on any gains made.

Final period exemption means that, under the law currently in place, people do not pay capital gains tax on gains made in the final 18 months of ownership, even if it was not their main residence during that period.

The Finance Bill aims to reduce that period to the final nine months of ownership for most people.

Commenting on the changes, Marc Selby, Chair of CIOT's Property Taxes Committee, said: 'We are concerned that the original assumption of an average time of four and a half months for selling a property is out of touch with the reality of the property market today because of the impact of COVID-19.

'We strongly suggest that the original evidence base needs review and that consideration should be given to delaying the squeeze in the final period exemption until the impact of COVID-19 on the property market is better understood.'

acca logo

CHARTERED CERTIFIED ACCOUNTANTS

We are registered as auditors and regulated for a range of investment business activities in the United Kingdom by the Association of Chartered Certified Accountants – the global body for professional accountants.

NEWSWIRE

Register to receive our monthly Newswire once a month and we'll send you an email packed full of essential business news and handy tax tips to help save you money.

REGISTER NOW