CGT and Autumn Budget 5 November 2022 at 10:27AM edited 5 November 2022 at 11:01AM in Cutting tax 18 replies 424 views

JPin

Hi All,

I have a rental property that has given problems for years. When the COVID tenants left having not paid in years I opted to repair the house and sell it. 8 weeks ago the sale was agreed and it now nears completion, however, my solicitor called me to advise that in terms of CGT and the autumn budget I could be negatively impacted and should think about terminating the sale. If the sale doesn't compete by next Thursday would changes in the budget impact me? 

purdyoaten2

Just like your solicitor I have absolutely no idea what is proposed in the autumn budget. Yes - you could be affected but, honestly, who knows? For what it’s worth I have never come across any major tax changes being applied retrospectively. I would proceed but that is just my opinion. 

JPin

purdyoaten2 said:

Just like your solicitor I have absolutely no idea what is proposed in the autumn budget. Yes - you could be affected but, honestly, who knows? For what it’s worth I have never come across any major tax changes being applied retrospectively. I would proceed but that is just my opinion. 

Would it be retrospective if the changes took effect from the 18th?

Cptralls

JPin said:

purdyoaten2 said:

Just like your solicitor I have absolutely no idea what is proposed in the autumn budget. Yes - you could be affected but, honestly, who knows? For what it’s worth I have never come across any major tax changes being applied retrospectively. I would proceed but that is just my opinion. 

Would it be retrospective if the changes took effect from the 18th?

I seem to be following you around the forum or vice versa?

I would imagine IF there are changes your sale should be complete before then. Not great advice from your solicitor, they should be focused on getting everything finalised. 

purdyoaten2

JPin said:

purdyoaten2 said:

Just like your solicitor I have absolutely no idea what is proposed in the autumn budget. Yes - you could be affected but, honestly, who knows? For what it’s worth I have never come across any major tax changes being applied retrospectively. I would proceed but that is just my opinion. 

Would it be retrospective if the changes took effect from the 18th?

It may seem obvious - but does that not depend on when you complete?

eskbanker

JPin said:

my solicitor called me to advise that in terms of CGT and the autumn budget I could be negatively impacted and should think about terminating the sale.

What's the solicitor's better suggestion, i.e. if you terminate and are left with a property you don't want, then what?

JPin

purdyoaten2 said:

JPin said:

purdyoaten2 said:

Just like your solicitor I have absolutely no idea what is proposed in the autumn budget. Yes - you could be affected but, honestly, who knows? For what it’s worth I have never come across any major tax changes being applied retrospectively. I would proceed but that is just my opinion. 

Would it be retrospective if the changes took effect from the 18th?

It may seem obvious - but does that not depend on when you complete?

It will complete this month, it just might not be before the 17th.

Jeremy535897

Completion is normally only relevant for capital gains tax, in respect to house sales, for the due date to complete the online return and pay the tax (within 60 days of completion). The date that is relevant for when the capital gain takes place is when unconditional contracts are exchanged, which may well have already happened?

If you already have an unconditional exchange of contracts, it is extremely unlikely that any change announced on 17 November will impact the tax liability. Even if you don't, changing the capital gains tax rate part way through the year has not happened before, but we live in strange times. Capital gains tax is a relatively low yielding tax, and in times of inflation can be an unfair one (hence the need for indexation allowances in past times of higher inflation).

purdyoaten2

Jeremy535897 said:

Completion is normally only relevant for capital gains tax, in respect to house sales, for the due date to complete the online return and pay the tax (within 60 days of completion). The date that is relevant for when the capital gain takes place is when unconditional contracts are exchanged, which may well have already happened?

If you already have an unconditional exchange of contracts, it is extremely unlikely that any change announced on 17 November will impact the tax liability. Even if you don't, changing the capital gains tax rate part way through the year has not happened before, but we live in strange times. Capital gains tax is a relatively low yielding tax, and in times of inflation can be an unfair one (hence the need for indexation allowances in past times of higher inflation).

Yes - as you say, when the sale becomes unconditional. If, as is likely, this has already happened the ‘advice’ offered by the solicitor is very strange. 

Jeremy535897

I suspect it is the solicitor pointing out the option to terminate, in case he is sued for not pointing it out. It would be very surprising if he was actually recommending that the sale be cancelled. Suggesting that a client "thinks about" terminating the sale does not amount to recommending it.

JPin

Jeremy535897 said:

I suspect it is the solicitor pointing out the option to terminate, in case he is sued for not pointing it out. It would be very surprising if he was actually recommending that the sale be cancelled. Suggesting that a client "thinks about" terminating the sale does not amount to recommending it.

Possibly, it does appear from the above comments that the information is irrelevant in this case. 

Perhaps a case of being over cautious?