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Chancellor Rishi Sunak has requested a review of Capital Gains Tax (CGT) rules from the Office for Tax Simplification (OTS), prompting concerns from investors that there could be a “tax raid” to help offset the public expenditure accumulated during the coronavirus pandemic.
The stamp duty cut announced in today’s budget will also apply to those buying second homes and buy-to-let properties. Government documents published following the Chancellor’s speech this afternoon state that the tax relief for properties worth up to £500,000 will apply for those buying a first or subsequent property. However, the 3 per cent surcharge for buying additional properties will apply in addition to the new standard rates.
The government has temporarily reduced the Lifetime ISA withdrawal charge from 25% to 20% so that investors affected by Covid-19 can access funds saved in their accounts. The reduced withdrawal charge applies to all unauthorised withdrawals until Monday 5 April 2021.
This is extraordinary, unprecedented economic shock therapy – interest rates as low as they've ever been for hundreds of years. The fact the Bank feels the need to do this shows the level of seismic coronavirus tremors running through the nation's finances. The primary aim is economic stimulus. Reducing interest rates is an encouragement to spend and invest – it makes borrowing cheaper, and saving less attractive. And that's what they want – more money flowing through the economy.
The Bank of England has made another shock Bank Rate cut, just eight days after it made an emergency rate cut to 0.25% in response to the economic pressure of the coronavirus outbreak. The Monetary Policy Committee held an emergency meeting on 19th March and unanimously voted to cut the rate to a historic low of 0.1%.
