Legal News | 27.05.21

As easy as ABC or as simple as CGT?

Regular readers will be aware of the ongoing Office of Tax Simplification’s (OTS) review of the capital gains tax (CGT) rules.

The first report proposed changes including aligning CGT rates with income tax rates and we updated you at the time in our newsletter https://wansbroughs.com/news-events/capital-gains-taxsignificant-changes-afoot/

The OTS has now published its second report, which highlights that many of us have limited awareness or understanding of the current rules. The OTS makes some practical recommendations, including:

Divorce

There is currently a window during which a separating couple can transfer assets to each other within the tax year of separation without triggering a CGT liability. Given that the average divorce takes a year this is seen as too short a window and the recommendation is to extend this window.

Private Residence Relief

The report recommends a review of the rules about nominating a home as a main residence to make sure the rules are more widely understood and it becomes simpler to nominate.

Property tax return 30 day limit

For those paying CGT on a property disposal, the current 30 day limit for payment is seen as too tight and the recommendation is to double this to 60 days.

As to whether these recommendations will be implemented…. watch this space! In the meantime, if you have questions then please get in touch with your usual contact at Wansbroughs or email wealth@wansbroughs.com