There have been proposals to increase Capital Gains Tax (“CGT”) from 18% to up to 50% in the upcoming emergency budget on 22 June 2010. CGT is payable on gains received which exceed the annual allowance. This is currently of £10,100 per year for individuals, personal representatives and trustees for disabled people and £5,050 for other trustees.
If this occurs it is likely to affect those who have a second property and are looking to sell. It is also likely to affect those who are about to retire and need to sell their second property to pay off their existing mortgage on their main residence or supplement their pension income.
If the CGT rate is altered this would mean that a significant amount of the property’s equity may have to be paid as tax; reducing the overall benefit for you as a former owner of a second property.
If you think that you may be affected by this proposed change, you should consider your options and seek professional advice now. Such action may save you considerable sums of money which would otherwise have to be paid in tax.