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Hi all, You may already have seen the Law Society's comments and subsequent news coverage of the latest amendment to the Finance Bill 2016. Clauses 77 and 78 give rise to an income tax liability for property disposals in the United Kingdom. The Law Society was concerned that: the clauses were introduced hastily and with no formal public consultation; and the wording of the clauses implies that buy-to-let investors could be affected If so, property disposals could attract income tax bills as high as 45%, rather than capital gains tax bills of 28%. We have covered the topic in depth on our website, including: the background to the legislation the intention behind it the potential issues it causes existing guidance on REITs that provide insight into HMRC’s processes HMRC's current guidance on ‘intention at acquisition’ https://www.commercialtrust.co.uk/news/property-investment/new-tax-on-btl-property-sales/ The landlord community has been understandably alarmed by the news. Note that the government has stated that the legislation will only affect overseas property developers; it is not intended to catch out buy-to-let investors. The NLA has obtained clarification from HMRC to this effect. The issue is not with the policy intention, it is with the wording. This is why the Law Society is urging ministers to revisit the draft legislation. It is also encouraging HMRC to publish clear guidance around it. Hopefully this will provide assurance and clarification to anyone who was worried by the news.
