Autumn Budget 2021: CGT Deadline Relaxed

No news is good for landlords as Chancellor Rishi Sunak's Autumn Budget 2021 passed without a simper. 

The only property tax change was extending the deadline for reporting and paying capital gains tax (CGT). 

The time limit was lengthened from 30 to 60 days after completion. The measure applies to all residential property sales in the UK by residents and non-resident homeowners from October 27, 2021. Until the change, taxpayers had longer to settle their bills – until the end of the tax year following completion.

Commonsense measure

"This will ensure that taxpayers have sufficient time to report and pay CGT, as recommended by the Office of Tax Simplification. In addition, when UK residents dispose of a mixed-use property, legislation will also clarify that the 60-day payment window will only apply to the residential element of the property gain," said the Chancellor.

The Association of Accounting Technicians (AAT) has lobbied for the change for the past 18 months.

"The process is reliant on clients setting up a CGT account online – which can take at least two weeks – within 30 days," said AAT Head of Public Policy Phil Hall. 

"Agents are not able to do this for their clients, which means this deadline is often missed, particularly around Christmas. It's a commonsense measure that helps taxpayers and their accountants whilst maintaining increased revenue for the Exchequer.  

Tax rules regularly change; please see the .gov website for the latest information

Plan to build 180,000 affordable homes

The Chancellor updated two other previous property announcements in his Budget:

• A £24 billion investment in the Affordable Homes Programme over several years to build up to 180,000 homes on brownfield sites with £16 billion for spending outside London
• A 4 per cent charge on profits over £25 million Residential Property Developer Tax (RPDT) to subsidise replacing cladding on tower blocks following the Grenfell disaster

Developers welcomed the cash for affordable homes but complained many local authorities were reluctant to give planning permission for houses on sites zoned for industry.

UC windfall for working tenants

Working tenants claiming Universal Credit will have more money in their pay packets by November. The Chancellor has trimmed the amount the government claws back from their benefits from 63p for every £1 earned to 55p. The examples he gave to MPs were:

• Single mothers earning national minimum wage and renting their homes pick up an extra £1,200 a year
• A couple with two children renting their home will gain £1,800 a year.

"This is a two billion pound tax cut for the lowest-paid workers in our country, supports their costs of living and rewards work," said Sunak.

Hospitality rates cut

Landlords renting out furnished holiday lets gain a welcome cash boost from a temporary cut in business rates. And he axed plans to increase rates for all businesses for the second year. 

Westminster sets the level of business rates in England. However, Scotland and Wales can choose their rates. Landlords can claim a 50 per cent discount on their bills up to a maximum of £110,000 in a tax cut worth almost £1.7bn.