The 2024 Spring Budget promised ’permanent tax cuts’; an oversimplification perhaps! Firstly, because permanence in politics and economics is unrealistic, but also because the promised tax cuts do not solely relate to tax rates but also tax reliefs. This is perhaps most apparent in the measures proposed in the Budget relating to property:
Tax rates
Capital gains tax (CGT): higher rate cut for residential property
Where, currently, gains from residential property are taxed to CGT at 18% for basic rate and 28% on the remainder, this measure will reduce the higher rate of CGT from 28% to 24%.
This measure will be effective from 6 April 2024.
Tax reliefs
Multiple dwellings relief
Multiple dwellings relief for stamp duty land tax (SDLT) currently provides a reduction in the SDLT payable on purchases of two or more dwellings in one transaction (or part of a series of linked transactions). This is to be abolished with effect from 1 June 2024.
Property transactions that exchanged on or before 6 March 2024 will be able to benefit from the relief regardless of completion date, along with any other purchases that are completed by 1 June 2024.
Furnished Holiday Lets (FHL)
FHLs are currently subject to specific tax laws under a preferential tax regime, however, these will be abolished from 6 April 2025 which in turn has a variety of tax implications for FHL business owners.
For the full article on FHL regime abolition, please see here.
For more Budget analysis, click here.