A few relevant announcements made by the Chancellor today:
- Stamp duty cuts will remain in place until 2025. That means no SDLT payable on residential purchases up to £250,000 (provided it’s not classed as a purchase of an additional dwelling).
- Capital gains tax allowance is cut from £12,000 to £6,000 from April 2023 and to £3,000 from April 2024. This will mean more people will have to pay CGT when selling a second property (or an inherited property) if it’s value has increased since they acquired the property. It’s highly relevant that this tax does not take into account inflation!
Similarly, in respect of inflation, tax bands have not changed (in fact the 45p rate was decreased to £125,000). This results in a defacto stealth tax. As wages rise to keep pace with inflation, more people will be brought into the higher tax band.