Spring Budget 2024 - CGT on disposals of residential property

Posted on 7th March 2024 by Streets - Capital Gains Tax

A higher rate of Capital Gains Tax (CGT) applies to gains on the disposal of residential property if the gain falls into the higher rate band. In the Spring Budget, the Chancellor announced a reduction in the higher rate that exists for residential property from the current rate of 28% to 24% from 6 April 2024. These rates apply to higher rate taxpayers as well as to trustees and personal representatives. The lower rate that applies to basic rate taxpayers will remain unchanged at 18%.

It is expected that the 4% reduction in the 28% rate will help increase revenue for the Treasury as the new rate is expected to increase the number of transactions. The Chancellor joked that perhaps for the first time in history both the Treasury and the OBR have discovered their inner Laffer Curve!

Most people are aware that they may not have to pay CGT when they sell their qualifying residential property used wholly as a main family residence. However other sales of property that are not a principle private residence, will be subject to CGT.

This includes:

buy-to-let properties
business premises
land
inherited property

There are various reliefs available from CGT for the sale of qualifying business assets.

The 18% and 28% rates of CGT that apply to gains in respect of carried interest remain unchanged from 6 April 2024. These rates previously mirrored those for CGT on disposals of residential property.

No Advice

The content produced and presented by Streets is for general guidance and informational purposes only. It should not be construed as legal, tax, investment, financial or other advice. Furthermore, it should not be considered a recommendation or an offer to sell, or a solicitation of any offer to buy any securities or other form of financial asset. The information provided by Streets is of a general nature and is not specific for any individual or entity. Appropriate and tailored advice or independent research should be obtained before making any such decisions. Streets does not accept any liability for any loss or damage which is incurred from you acting or not acting as a result of obtaining Streets' visual or audible content.

Information

The content used by Streets has been obtained from or is based on sources that we believe to be accurate and reliable. Although reasonable care has been taken in gathering the necessary information, we cannot guarantee the accuracy or completeness of any information we publish and we accept no liability for any errors or omissions in material. You should always seek specific advice prior to making any investment, legal or tax decisions.