Autumn Statement – Tax Announcements of NoteDecember 9, 2013
The surprise announcement in an otherwise quite low-key Autumn Statement delivered on Thursday 5 December 2013 was that the final period exemption for Private Residence Relief fromCapital Gains Tax (CGT) is to be reduced. This relief previously enabled second home owners to claim relief on the last three years of ownership but this period has been halved to eighteen months.
The Treasury have stated that the reduction is designed to “reduce the incentive for those with multiple homes to exploit the rules”. It is expected that the reduction will not take effect until 2015/16 and will bring in an extra £65million in tax revenue.
The Autumn Statement also announced that for the first time, CGT will be imposed upon future gains on residential property bought by non-UK residents. This proposal is aimed at fairness in the housing market for UK resident purchasers in competition with overseas investors in property and is expected to come into force in April 2015.
The Treasury’s tax break for the approximately four million married couples in the UK was once again proposed. From April 2015, married couples and civil partners, neither of whom are higher rate taxpayers but one is earning less than the personal allowance, will be able to transfer £1,000 of their income tax personal allowance to their spouse or civil partner.
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