The big overhaul for capital gains tax ‘is yet to come’

With government debt at a record high, it has been rumoured for quite some time that capital gains tax rates would increase, as part of wider changes to taxation. But there was no mention of CGT in the Budget yesterday.

Rishi Suna

Some experts predicted that chancellor Rishi Sunak would raise the 20% rate to bring it more in line with income tax rates.

However, there was no change – at least not yet.

“As predicted, the big overhaul for CGT and IHT is yet to come,” said Camilla Bishop, head of private client at city law firm DMH Stallard.

There is now speculation that the government will announce an increase to capital gains tax at a later stage.

The government has already committed to publishing a number of tax-related consultations and calls for evidence at the end of March. Will this include CGT?

The government’s tax adviser last year recommended that CGT be overhauled with proposals that could see the number of people hit by the duty increase significantly.

Robert Pullen, partner Blick Rothenberg, said: “Big statements were made in the Budget, but it was notable for the silence on rumoured increased to capital gains tax and inheritance tax reform.

“Hardly any mention at all was made on these two taxes beyond freezing the respective exemption thresholds, with the inheritance tax threshold now remaining at £325,000 since April 2009.

“Whilst the chancellor backing down was almost inevitable following Lockdown number three, the rumours will not go away and all eyes will now be on a future Budget, possibly in the Autumn, for any increases as measures are taken to try to peg back the huge deficit.”

Last month, HMRC published its tax receipts data, which showed CGT receipts were the highest they had ever been. The CGT receipts for the tax year to date have totalled £10.4bn.

Michael Cook, national lettings MD at LRG, said: “The announcement regarding the CGT is great news for the property sector, especially for lettings agents and their landlords, as they play a key role in maintaining a strong and thriving private rented sector.

“The increase in CGT would have dramatically reduced the supply of rental properties, and could have prompted a large number of landlords selling up in order to beat any CGT deadlines and thereby ousting tenants from their homes.”

Neil Cobbold, chief sales officer at PayProp, added: “Despite strong rumours of it happening, an increase in CGT rates did not come to pass. But while landlords will breathe a sigh of relief today, they should remain prepared for CGT changes in the coming years.”


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  1. AlwaysAnAgent

    Let’s hope that Sunak uses this unique opportunity to overhaul some of our deeply unfair taxes: SDLT is a perfect example.


    If there’s an instant and dramatic rise in CGT it will not encourage landlords to sell. It’s the opposite and a higher CGT charge may discourage landlords from selling.

  2. paulgbar666

    Unfortunately many LL won’t be discouraged from selling by CGT increases.


    They won’t have any alternative.


    Many LL need and want to sell up.

    Many want to sell now but can’t because they can’t get rid of tenants due to the completely dysfunctional eviction process.


    It could take 2 years from now if not longer to get rid of tenants.

    During this period many tenants will simply stop paying rent.


    LL are trapped by inability to remove tenants quickly.


    Sunak knows he has LL just where he wants them.

    He will take a far larger chunk of the CG since 1997 especially from SE properties as that is where the growth has been.

    Basically LL are stuffed either way.

    They will be suffering large CG bills and rent defaulting.

    Getting out of the PRS will ve a very long and expensive process for LL.


    But they might as well issue S21 while they can backed up by S8 for the inevitable rent defaulting.



    1. AlwaysAnAgent

      You’re at the wrong end of BTL Paul. Most of my clients are not highly geared and they use an agent to maximise their healthy returns. Their rent arrears are almost non-existent. I enjoy being a landlord and it’s lucrative.

      Highly geared landlords who do try and do everything themselves, like penny pinchers, have been exposed for years. Too much debt. No referencing. No rent protection. Poor understanding of the legal process. Badly maintained properties. Too much interfering with tenancies. Discrimination etc.


      It’s a good thing if these landlords exit the market and are replaced by landlords with lower gearing and a better attitude to renters. It’s the circle of life.

      1. paulgbar666

        Define too much debt!


        Personally in light of the current circumstances anymore that 50% LTV is too much.


        I’m at 75% and my offer isn’t like the other valid points you make.

        Poor offers should leave the market.


        I’m such a good LL that I regularly have former occupants returning to me.


        However despite my being an excellent LL with a great offer I still intend to get out of the PRS.


        For me 75% LTV leverage is far too risky.

        It is the industry average or rather was but I consider that average way too optimistic in light of eviction bans etc.


        Fortunately I have suffered little rent defaulting and I have reduced rents.


        But the stress of teetering on bankruptcy if rent defaulting occurred without being able to quickly get rid of those rent defaulters is just too risky for me to continue.

        So whilst I am sitting pretty currently I’m not deluding myself that this state of affairs will continue.


        I’ve considered the worse case scenario and that has been the decider for me to determine to sell up.


        Things are only going to become more difficult to remove rent defaulters.

        Due to the impossibility of sourcing occupants who could qualify for RGI etc the risks to me are far too high.


        Despite being very successful the risks for me are no longer worth it.


        I intend to just take on a lodger.

        That will enough extra income for me.

        But as you suggest there are many LL out there that don’t get the offer right.

        As in any business they will be culled.

        I intend to cull myself!!


        Unfortunately many good LL are doing the same which is a great loss to tenants who desperately need LL to remain so.

        But hey we are where we are!




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