HM Revenue & Customs (HMRC) stands to break records this year as sales on houses and flats generate a record amount of tax.
NFU Mutual, which published the figures, says the tax office will take more than £8.8 billion in Capital Gains Tax (CGT) in 2018.
The insurance provider says this would be a five per cent year-on-year increase and break all previous records.
By analysing the receipts received in January, NFU predicts that a large chunk of the CGT take will be from landlords selling houses and flats they’ve been renting out.
“In doing so, they are hammered by an extra eight per cent surcharge on standard rates of capital gains tax”, said Sean McCann of NFU Mutual.
He added: “The Office of Budget Responsibility forecasts show receipts increasing sharply to £13.3 billion in five years’ time, which suggests that more and more buy to let investors are expected to unload properties as tax changes bite.”
Recent tax changes, including lowering the ATED threshold to £500,000 and reducing mortgage interest relief, have had an impact on landlords and their ability to continue to generate a profit. However, consideration should be given to CGT before offloading a property.
CGT is applicable on all residential property providing it is not your main residence, and, depending on your income status, is charged at 18 or 28 per cent.
If you have any questions regarding your property tax liability, please get in touch.