As Government borrowings are expected to top £180billion for the current financial year an incoming Government, of any colour, is going to have to look at ways of increasing revenue and decreasing expenditure, according to Simon Dixon Smith of Savills, Chelmsford.
He said the latter was limited by political acceptability and so increasing revenue was inevitable.
As transaction volumes and property values are starting to creep up again most investment property sales will be showing capital gains. The current rate of Capital Gains Tax (CGT) at 18% is very low and looks increasingly out of line with a new top marginal rate of income tax of 50%.
"Such a large discrepancy is unlikely to remain for long," Dixon Smith said.
Many people may be considering disposing of property, either through a gift or transfer to successors, or by sale to reduce borrowings in the expectation of increasing interest rates.
Dixon Smith said: "Now is the time to take stock of what you have and where you want to be. Don’t miss this window of opportunity as net proceeds may fall further after the next Budget."
The current, low, rate of CGT means that even if property prices recover more quickly over the next two or three years the net proceeds are likely to be eroded to a greater extent by an increase in CGT.
Where a transfer to the next generation is being considered action now will almost certainly result in a lower tax bill than after the next Government Budget.
Have your say on this story using the comment section below
Add this page to your favorite Social Bookmarking websites
