Unwary expats are facing another property stealth tax when they sell investment property at a profit.
HM Revenue & Customs proposes to cut tax relief for landlords who have lived in the rental home they are selling as their main home.
Plans are already underway to scrap lettings relief, which can be worth £40,000 in capital gains tax relief to an expat landlord.
Now, the final tax-free period of 18 months is facing a cut – down to 9 months.
The result will be landlords will pay an extra 9 months of CGT.
HMRC says the change is to thwart landlords falsely claim principle residence relief to reduce CGT bills.
But tax experts argue the measure could leave landlords and other homeowners facing a tax bill if they experience delays in selling property.
The Chartered Institute of Taxation (CIOT) is concerned many ordinary homeowners living in areas where properties are slow to sell could be snared in the CGT tax net if the relief is cut.
Aparna Nathan QC, who chairs CIOT’s CGT & Investment Income Sub-committee, said: “If HMRC have serious concerns about abuse of the PRR, they could consider conducting a broader consultation about the objectives and effectiveness of the relief.
“It is important for HMRC to provide the evidence base that has been used to evaluate whether nine months is sufficient time for those who are genuinely trying to sell to move to a new house particularly as there are likely to be large regional variations and differences depending on property values.”
P2P bridging lender goes to the wall
Hundreds of investors are facing losses of tens of millions of pounds after the collapse of a peer-2-peer bridging lender that has run into trouble.
Lendy, an online platform pooling funds from 600 investors, has fallen into administration with investors holding £160 million of loans, of which £90 million are described as in default.
The collapse came during an investigation by regulator the Financial Conduct Authority.
Landlord lose brothel case
A corporate landlord in New Zealand has lost a court challenge after claiming compensation from a tenant running a brothel in her rented home.
Earle Properties claimed tenant Kelly Lien unlawfully run the brothel in her six-bed rented home in Mount Cook.
The company had also claimed a share of the brothel’s profits, but withdrew the action.
The tribunal ruled the brothel was legal as New Zealand laws allow brothels to run anywhere provided they meet planning guidelines.
