PayProp: Agencies can help landlords with Capital Gains Tax advice
Lettings agencies will have an important role in helping landlords to navigate upcoming Capital Gains Tax (CGT) changes according to PayProp.
PayProp believes that agencies must focus on compliance adding that they can help landlords by raising awareness, offering advice and referring clients to tax experts.
From 6 April, anyone who sells a property on which CGT is payable will be required to pay an estimate of the tax within 30 days of the sale completing; a change from the current grace period of between 10 and 22 months.
Neil Cobbold, chief sales officer at PayProp, said: “These significant and complex CGT changes are set to affect many landlords who are looking to sell properties in the near future.
“Despite this, they have arguably gone under the radar, receiving less coverage than other industry issues such as stamp duty changes, the removal of Section 21, the Tenant Fees Act and the Homes (Fitness for Human Habitation) Act.
“Over the coming weeks, it will be important for letting agencies to ensure their landlords are aware of these changes and advise them where appropriate.
“Most landlords selling properties after 6 April will need to seek expert tax advice when paying their CGT bill.
“It could therefore be beneficial for agencies to have a partnership with a professional tax expert in place, so that landlords looking for advice can be referred to a trusted source quickly and efficiently.”
In addition to the CGT reforms, from April the final stage of Section 24 which outlines the removal of buy-to-let mortgage interest tax relief will commence.
This means that landlords will only be able claim a tax credit on buy-to-let mortgage interest at the basic rate of income tax, which is currently 20%.
Cobbold added: “Agencies need to make sure they are on hand to guide their clients through this busy and potentially costly time, while also offering them value for money and a first-class personal service.
“This is an opportunity for agents to demonstrate their value to landlords who may be looking to cut costs or reduce activity.
“While these tax changes will require some adjustment, due to the strength and growth of the PRS, there will still be plenty of opportunities for the best letting agencies to take on more business and thrive in 2020.”