Capital Gains Tax and What It Means for Property Owners & Investors
For property owners, developers, and investors, changes to Capital Gains Tax (CGT) are always high-stakes. Recent reforms – such as changes to rates and reporting rules – mean planning is more essential than ever. Below is an updated guide, referencing official sources.
Understanding CGT: Rules, Rates, and Allowances
CGT is a tax on gains when you dispose of assets (e.g. property, shares) – it is the gain that is taxed, not the sale price.
For disposals of residential property, special rules and higher rates typically apply.
Since 30 October 2024, the main CGT rates increased from 10%/20% to 18%/24% for gains on non-residential assets (residential property rules are adjusted accordingly).
The Annual Exempt Amount (the tax-free allowance) remains a key planning lever.
Reporting Changes & Compliance
Since April 2020, for disposals of UK residential property, taxpayers must report and pay CGT within 60 days of completion using the “CGT on UK Property Service” via GOV.UK.
Failure to timely report can lead to penalties or interest.
For non-residents disposing of UK property, similar reporting obligations apply under the UK Property Reporting system.
What the Recent Trends and Forecasts Show
The Office for Budget Responsibility (OBR) estimates that CGT will raise around £19.7 billion in 2025–26, reflecting its importance as a revenue source.
A recent Parliamentary Research Briefing outlines reforms since 2008 and alerts to emerging policy changes in CGT.
Tax Planning Strategies for Property Owners
Timing your disposals to fall into tax years when allowances and lower rates may apply.
Using spouse transfers to make use of both individuals’ annual exemptions.
Considering incorporation (but carefully, since CGT vs corporation tax trade-offs are complex).
Reliefs & exemptions – e.g. Private Residence Relief, Business Asset Disposal Relief (for qualifying business disposals), rollover relief (if reinvesting). Each has detailed conditions.
The Kent / Local Angle
Property in commuter belts, coastal areas or countryside in Kent attracts investors and second-home owners; capital gains decisions here are high stakes.
Where local property markets appreciate strongly, even modest disposals may cross into higher tax brackets.
For clients holding holiday lets along Kent’s coastline, ensure their property’s use qualifies under relief rules (or risk losing reliefs).
Conclusion
Capital Gains Tax is no longer a passive issue – it demands a proactive strategy. If you’re planning any disposals, restructurings, or revaluations, early consultation makes a real difference. At ATN Partnership, we can run modelling to help minimise your CGT exposure and make sure you meet all reporting compliance deadlines. Contact our Client Managers for further information.
Sources: GOV.UK; OBR.UK; ATT.ORG.UK; PARLIAMENT.UK