Article
Changes to landlord Capital Gains Tax rules
Stay informed on the latest changes to landlord Capital Gains Tax rules, including reduced tax-free allowances, lower CGT rates for higher rate taxpayers, and the abolition of multiple dwellings relief and Furnished Holiday Letting scheme. Learn how these updates, effective from 2024, impact your property investments in England and Northern Ireland. By Catherine Heinen, FCCA.
By Catherine Heinen, FCCAThis means that landlords planning to sell their property could face changes in their tax liabilities and FHL owners need to be aware of how the abolishment can affect them.
The changes are as follows:
- The Capital Gains Tax (CGT) rate for higher rate taxpayers will reduce to 24% from 28% from 6th April 2024
- The CGT tax free allowance (Annual Exempt Amount/AEA) will reduce from £6,000 to £3,000 from 6th April 2024, with the amount for trustees reducing to £1,500.
- Multiple dwellings relief is being abolished from June 2024
- The Furnished Holiday Letting (FHL) scheme is being abolished from April 2025
- Increased fines for right to rent scheme non-compliance
Higher rate Capital Gains Tax rate reduced
The Spring Budget 2024 announced that the higher rate for CGT on residential property sales would reduce from 28% to 24% from 6th April 2024.
The main CGT residential property rate, and non-residential property rates are not changing.
Capital Gains Tax Annual Exempt Amount reduced
The Annual Exempt Amount (AEA) for CGT is reducing from 6th April 2024. The amount for individuals will be £3,000 for the 2024/25 tax year and the amount for trustees will be £1,500 for 2024/25.
Multiple dwellings relief abolished
Multiple-dwellings relief will be abolished from 1st June 2024, as announced in the Spring Budget 2024. Multiple dwellings relief applies when you buy more than one dwelling in a single transaction, and results in a lower rate of Stamp Duty Land Tax.
Furnished Holiday Letting (FHL) scheme abolished
The Furnished Holiday Letting scheme is being abolished from 6th April 2025. The spring Budget 2024 announced that the FHL scheme will be abolished, with the implementation of anti-forestalling rules will apply from 6th March 2024. The implications for FHL owners can be found here.
Right to rent scheme non-compliance fines increased
From April 2024, the fines for landlords who do not comply with the right to rent scheme have increased to:
- First breach fine from £1,000 to £10,000 per occupier
- Repeat breach fine up to £20,000 per occupier
How TaxAssist Accountants can help
We would be delighted to help you understand how the changes impact your tax position and calculate the impact these changes have on your tax position. For more information, please contact us online here or call our team on 0203 457 3737.
Date published 16 Apr 2020 | Last updated 28 May 2024
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Catherine Heinen, FCCA
Catherine is a Technical Content Writer at TaxAssist Accountants, and a qualified accountant. With experience working at two accountancy practices in the UK top 50 accountancy firms according to Accountancy Age, Catherine has significant experience in accounts, tax returns and advising clients. Catherine ensures businesses, business owners and individuals are kept up to date and informed by providing concise and informative technical material.
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