Speculation has grown that the Conservatives may make a manifesto pledge to remove some family homes’ long-established exemption from Capital Gains Tax.
Over the Bank Holiday weekend a columnist in the Sunday Telegraph mentioned the possibility and an article the previous day in The Sun cited “one source” as saying it was under consideration “meaning Brits would face a whopping tax bill when they sell”.
Iain Dale, a publisher and political commentator and former Conservative parliamentary candidate, wrote on Twitter on Saturday about the possibility. Housing market commentator Henry Pryor wrote several tweets on the subject over the past week, suggesting it was rumoured as a measure for possible inclusion in the Tory manifesto ahead of the June 8 General Election.
Then in a TV interview on Sunday, Prime Minister Theresa May did not give a clear answer to a suggestion that she may wish to apply CGT on the sales of main homes worth over £5m.
“If you look at what has happened in terms of tax, the top one per cent of people are paying a higher share of tax under us than they did in any year under a Labour government … I think it is right that we should ensure the tax system is balanced and, as I have been clear, it would be my intention to reduce taxes on working families” she told the BBC”s Andrew Marr in response to a question on CGT.
Just over a year ago the then David Cameron-led Tory government reduced the basic rate of CGT from 18 per cent to 10 per cent, and the higher rate from 28 per cent to 20 per cent – but not on residential properties that qualify for the tax, which are chiefly buy to let premises and holiday homes.
Instead, then-Chancellor George Osborne maintained the higher rates specifically for buy to lets and second homes – a measure left untouched by current Chancellor Phillip Hammond.
The Tory manifesto is expected to be published within the next two weeks.