Business Owners And Landlords Hit With CGT Hike
Thousands of small business owners and landlords will bear the brunt of Jeremy Hunt’s quest to boost his Treasury coffers.
Revealing the latest Dividend Allowance and Capital Gains Tax annual exempt amount in last week’s budget Hunt said the government will reduce the Dividend Allowance from £2,000 to £1,000 from April next year and to £500 from April 2024.
Meanwhile the Capital Gains Tax Annual Exempt Amount will also reduce from £12,300 to £6,000 from April 2023 and to £3,000 from April 2024.
Hunt says these measures will raise over £1.2 billion a year from April 2025.
But the move was widely criticised, not least by Kevin Roberts, managing director Legal & General Mortgage Services, who says the buy-to-let market is already feeling the impact of higher mortgage rates.
Kevin Roberts, L&G Mortgage Services
And he adds: “The new changes to capital gains tax will add further pressure to landlords and we are likely to see more rental properties put up for sale.
“A greater supply of housing for buyers will definitely be welcomed by some, but this could prove a painful development for renters.”
Roberts says that the rental market is already suffering from a lack of stock and rising rents and is an area of the market that warrants more government attention.
We all know the financial pressure many would-be borrowers are under and this is an opportunity for the mortgage industry to work together.”
“The near-constant changes in the mortgage market can also make borrowing seem a daunting prospect, especially at a time when so many are already carefully scrutinising their expenditure.
“We all know the financial pressure many would-be borrowers are under and this is an opportunity for the mortgage industry to work together to show we’re serious about financial inclusion and to shape the future of our sector.”
David Postings, chief executive of UK Finance, adds: “These are challenging times for the country and the chancellor has had to take some tough decisions. A strong and internationally competitive banking and finance sector has a key role to play in supporting the economy through the current challenges.”