Leading land agents Aston Mead are advising anyone who is considering selling land to do so as soon as possible, before the UK government introduces tax rises to help pay for the Coronavirus crisis.
The Chancellor Rishi Sunak has already warned that “hard choices” will need to be made, after the state pumped over £200bn extra into the economy to support jobs, business and incomes. Meanwhile, the Institute for Fiscal Studies has said borrowing will hit levels not previously seen in peacetime, which will mean that tax rises of more than £40bn a year are “all but inevitable”.
Aston Mead Land Consultant Natasha Burr said “Make no mistake – when the Chancellor talks about ‘hard choices’, he’s talking about tax rises. And as one of the largest sectors of the UK economy, he is likely to see property transactions as low-hanging fruit, ripe for picking.
“So if you have land to sell, and want to avoid any additional taxes, we would advise you to do so sooner rather than later. After all, at the moment, selling-off part of your garden can be carried out completely tax-free. But there are no guarantees the situation will stay that way.”
Natasha Burr points out that previous Conservative manifesto commitments might prevent raises to the three biggest taxes – income tax, national insurance and VAT, which currently bring in more than half of government revenue.
She adds: “At the moment, state pensions are protected by a so-called ‘triple lock’, which guarantees they rise with wages, prices, or 2.5% every year, whichever is highest. Cutting spending might be difficult too – especially on health when the NHS has been pushed to its limits during the pandemic.
“But one tax noticeable by its absence in this list is Capital Gains Tax (CGT). The Chancellor could decide to align rates more closely with income tax – something which could theoretically raise an additional £14bn a year for the exchequer. Similarly, there are suggestions that the annual tax-free amount could drop to as little as £1,000. Both of these measures would have a huge impact on the finances of those selling land.
“Finally, of course, there is of course the option of a new tax. There could be a Covid-19 levy on payslips and tax returns which could be created to pay off the virus debt – something which would probably last for decades.
“The truth is – nobody knows how big the final Covid bill is going to be, and nobody knows what measures will be taken to pay for it. But the easy solution to avoid any future tax rises is to sell land now to avoid a nasty surprise later.
“Recognising that getting planning permission on any proposed area of land can take some considerable time, if you want to squeeze the maximum out of your next investment decision by selling land, you need expert advice now. And we’re happy to provide it.”