Nov

Chancellor ‘planning tax raid on landlords’ to plug £50bn hole in public finances

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Landlords could be hit with a rise in capital gains tax (CGT) along with cuts in reliefs and allowances as part of the Chancellor’s autumn statement due on November 17th.

According to a report in The Telegraph, Jeremy Hunt and PM Rishi Sunak have agreed that those with the “broadest shoulders” should bear the brunt of efforts to help plug the £50 billion hole in Britain’s public finances.

Treasury sources said sweeping changes to CGT, including to the headline rate, are being considered but cautioned that much can change before the statement. It is understood that reductions in capital gains tax reliefs and allowances are most likely to get the green light.

CGT re-alignment

The idea is not new, as a report from the government’s tax advisers two years ago suggested that it could bring CGT – currently 28% on residential property and 20% on other assets – in line with income tax so that higher-rate taxpayers faced a flat rate of 40 or 45%.

The Office of Tax Simplification also suggested reducing the annual CGT allowance threshold from £12,300 to £5,000 or less. Property experts warned then that this could spark a mass exodus of landlords from the market.

Previous Conservative initiatives include a rumoured plan this summer by former PM Boris Johnson to tempt buy-to-let landlords into selling properties to first-time buyers by charging lower capital gains tax.

There will be no extension of the stamp duty cut adopted by Liz Truss, the source revealed, meaning no extra intervention targeted at propping up property prices, nor is the Treasury working on a new scheme to help people who face mortgage defaults.

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