Spring Budget 2024: Higher residential property Capital Gains Tax reduced to 24%

Chancellor Jeremy Hunt has announced in his spring 2024 budget that from 6 April 2024 the higher rate of Capital Gains Tax (CGT) on property disposals will be cut from 28% to 24%. Jeremy Hunt claims that this will bring... Read more

Chancellor Jeremy Hunt has announced in his spring 2024 budget that from 6 April 2024 the higher rate of Capital Gains Tax (CGT) on property disposals will be cut from 28% to 24%.

Jeremy Hunt claims that this will bring in more money as the reduction will encourage more housing disposals of second homes and residential properties which do not fully benefit from Private Residence Relief.

If you are a UK tax resident and dispose of a UK residential property, you are required to report and pay any CGT within 60 days of completion.

Individuals, trustees and personal representatives who are liable to pay CGT on higher property disposals will be affected by this change. This tax reduction from 28% to 24% is for residential property disposals above the basic rate band. There has been no change to the 18% rate for gains on residential property disposals that fall within the basic rate band, and this is expected to remain the same for 2024/25 tax year.

This is not the only change as it was announced previously that the CGT free annual exempt allowance (AEA) which is currently at £6,000 for 2023/24 tax year and is due to be halved to £3,000 from the 2024/25 tax year. The AEA available to trustees is half the normal level, so for 2023/24 they will have an AEA of £3,000, with £1,500 available from 2024/25.

It is expected that many property sales in March 2024 will likely be delayed until after 6 April 2024 if they fall into the higher residential tax rate.

For advice on the tax implications of the sale or transfer of a UK residential property or any related matter, please contact us

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