Stamp duty rates were changed by Rishi Sunak in 2020 in a bid to support the economy and keep the property market going. Today, the Chancellor extended the support measures in highly welcomed news.
In responding to the announcement, Francesca Carlesi, the Co-founder and CEO of Molo Finance, had the following to say: “The extension is a responsible move by the Government.
“Not only is it necessary to ensure market resilience and sustain the UK economy, but it is also welcome from a micro perspective too, with many consumers breathing a sigh of relief.
“The pandemic has dramatically impacted all of our lives and steps such as this are vital for us to rebuild.
“Here at Molo, we are confident that the Government’s actions today are a step in the right direction and bring us close to a successful recovery in the long run.”
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Mr Sunak extended the stamp duty support into late 2021 and David McKendrick, a chartered financial planner at Equilibrium, detailed what additional tax changes consumers should keep an eye out for: “Some clients of ours have taken the opportunity to organise a property portfolio using the lower CGT rates and stamp duty holiday below £500k, which has now been extended.
“Selling or gifting has been made more amenable as a result of this, coupled with the threat of increased CGT rates.
“It’s already been widely publicised that the CGT take is higher this year in view of the changes. Will the Chancellor now heighten that further by perhaps delaying the new rates to the new tax year, or the following one?
“This would give people a chance to realise the gains and would provide the Chancellor with a short-term boost. The forewarning would also smooth the path somewhat.
“So, in light of the changes, what to do now?
“What consumers should now watch out for is a potential ‘stealth’ CGT tax, by way of removing the CGT uplift available on death.
“Currently, you are not charged capital gains tax and inheritance tax on death, and any assets inherited on death pass with the agreed value at probate.
“Removing this probate value would bring in valuable additional revenue for the Government, but could present problems for many.
As it stands, no stamp duty is levied on property with a value less than £500,000.
However, stamp duty is levied at five percent on property valued between £500,001 and £925,000.
For properties valued between £925,001 to £1.5million, 10 percent will be charged.
Any properties valued above £1.5million will face a stamp duty tax charge of 12 percent.