CIOT calls for property sales tax change
The government should consider delaying changes to capital gains tax (CGT) rules in relation to residential property sales to take account of the impact of COVID-19 on the property market, according to the Chartered Institute of Taxation (CIOT).
The measure is included in the current Finance Bill, which began its committee stage in the House of Commons on 4 June.
Private Residence Relief (PRR) enables most owner occupiers to sell their properties without being liable for CGT on any gains made.
Final period exemption means that, under the law currently in place, people do not pay capital gains tax on gains made in the final 18 months of ownership, even if it was not their main residence during that period.
The Finance Bill aims to reduce that period to the final nine months of ownership for most people.
Commenting on the changes, Marc Selby, Chair of CIOT’s Property Taxes Committee, said: ‘We are concerned that the original assumption of an average time of four and a half months for selling a property is out of touch with the reality of the property market today because of the impact of COVID-19.
‘We strongly suggest that the original evidence base needs review and that consideration should be given to delaying the squeeze in the final period exemption until the impact of COVID-19 on the property market is better understood.’