Latest news with #councilTax
Telegraph
2 days ago
- Business
- Telegraph
Suspend Tory second homes tax raid, Grant Shapps urges Labour
A senior Conservative has urged Labour to suspend his party's second home council tax premium. Sir Grant Shapps has called for the double council tax to be paused in 'areas where markets are seizing up and tourism is taking a kicking'. The former housing minister has also piled pressure on Angela Rayner to conduct an impact assessment and stop making 'decisions in the dark'. He is the latest politician to back The Telegraph's campaign against the 100pc council tax surcharge on second homes, which came into effect in 230 town halls on April 1. Kevin Hollinrake, shadow housing minister, said: 'This tax should be used to keep council tax bills down, or to build affordable housing. Labour is doing neither of these. 'There has been a cavalier approach to implementing it, with Labour doing no research on its effect on the housing market and leaving local residents to pick up the tab. 'Labour is using this tax as a club to hammer middle England, and trying to pull the wool over the eyes of hard-working families while they're at it.' Nigel Farage, Reform UK leader, said: 'Owning property used to be a right and a freedom. Today it is an excuse for the Government to use extortion.' Mrs Rayner's department has previously refused to investigate the impact of the second home council tax raid on local economies, housing markets or tourism. Instead, the Government said it was up to individual councils to decide whether it was 'effective'. Despite this, The Telegraph revealed that eight in 10 local authorities with the second home premium failed to carry out impact assessments. Sir Grant, who served as housing minister between 2010 and 2012, said: 'Labour's cack-handed council tax whack on second homes is walloping ordinary families with four-figure bills while doing absolutely nothing to get roofs over people's heads. 'I spent my time as housing minister cutting red tape and backing aspiration, not penalising it. So here's my three-point common-sense fix: first, commission an independent impact assessment – no more decisions in the dark. 'Second, hit pause on that 100pc premium in areas where markets are seizing up and tourism's taking a kicking. Third, hand power back to councils to target genuinely empty or derelict properties instead of clobbering every granny annexe in sight. 'Do that, and we'll help communities thrive instead of driving them into the ground.' The second homes premium was introduced in the Levelling Up and Regeneration Act by Michael Gove in 2023 to fix the housing crisis. But it has since been utilised by town halls as a way of boosting depleted coffers. Since its introduction in 2017, the property market has crashed in areas of Wales. Pembrokeshire suffered an 8.9pc decline in house prices after owners raced to sell up their properties and avoid the tax raid. Despite pushing prices down, the properties being sold remain out of the budget of locals, Carol Peett, a buying agent at West Wales Property Finders said. During his tenure as housing minister, Sir Grant overhauled social housing. He abolished the Tenant Services Authority, which was responsible for regulating social landlords. The powers were passed to the Homes and Communities Agency. In 2012, the Conservative government introduced the affordable rent regime, to give housing associations a way to increase their income and carry on building new homes during the era of austerity. He left the role when he was appointed chairman of the Conservative Party. A Ministry for Housing, Communities and Local Government spokesman said: 'We are determined to fix the housing crisis we have inherited through our Plan for Change, and we know that having too many second and empty homes in an area can drive up housing costs for local people and damage public services. 'That is why local authorities have powers introduced by the previous government to choose to add up to 100pc extra on the council tax bills of second homes and up to 300pc on empty homes.'
Daily Mail
5 days ago
- Business
- Daily Mail
Can I gift my £330,000 second home to my adult kids without paying tax?
I live in Australia (and am a tax resident here) and I own a leasehold flat in Suffolk that I use when visiting the UK. I no longer wish to own the property due to the doubling of the council tax on unoccupied properties. Also, the water is muddied with regard to possible liability for UK inheritance tax. There is no inheritance tax here in Australia. I would like to gift it to my two adult children since I don't need the funds here and they will eventually inherit the property anyway. If I transfer title to them, do they have to pay stamp duty, and if so, at what rate? It is on sale at present for £330,000 Due to the government's war on landlords and buy to let (neither of which applies to me since it is not let out), it will probably not sell at that price. If stamp duty is levied on the gift, would it be possible to agree a notional sale price of £250,000 in order to fall into the lowest tax bracket, or can it even be exempt from stamp duty since there will be no money changing hands? They will then become second home owners, so does the transaction incur additional stamp duty? P.A, via email SCROLL DOWN TO ASK YOUR FINANCIAL PLANNING QUESTION Harvey Dorset, of This is Money, replies: For many Britons living abroad, its nice to continue to have a base to come back to when you visit. This would be especially the case for you, as your trips from Australia are likely to be for longer periods given the distance between the two countries. Unfortunately, you tax changes that came into effect last month in Suffolk mean that you are now required to pay twice the standard council tax rate on your property, as it is only 'occupied periodically.' East Suffolk Council states: 'At a Full Council meeting held in February 2024 it was approved that from 1 April 2025 a 100 per cent Second Home Premium charge will be applied to properties that are furnished and do not have anyone living in them as their main home. This means that 200 per cent Council Tax is payable.' Understandably, you have decided it is not worth you keeping the property under the current ownership circumstances. Instead, you want to give the flat to your children, which would pass on some wealth and help with potential inheritance tax liabilities. As you say, there is no inheritance tax in Australia but there is in the UK, meaning your situation is harder to work out. Meanwhile, as discussed below, there are other taxes that you may need to watch out for. This is Money spoke to two financial advisers to find out what you need to do in order to pass your flat to your children while keeping tax to a minimum. David Denton, head of technical at Quilter Cheviot, replies: First, from an inheritance tax point of view, your instincts are right to consider future exposure. While Australia abolished inheritance tax in the late 1970s, UK IHT still applies to most UK-based assets – including property – regardless of the tax residency or domicile of the owner. So, although you're an Australian tax resident, your UK flat remains within the scope of UK IHT. That said, with the nil-rate band currently set at £325,000 and your flat valued at around £330,000, the potential liability could be relatively minor, although the nil rate band is frozen until at least 5 April 2030. Now to the more immediate question of gifting the property to your children. Provided there is no outstanding mortgage on the flat, a transfer of ownership as a genuine gift would not trigger Stamp Duty Land Tax (SDLT) on the part of your children. SDLT is only payable if there is 'consideration' – for example, if the recipient assumes liability for a mortgage, or pays for the property. However, even if the transfer is exempt from SDLT because there is no consideration, your children may still face the 3 per cent additional homes surcharge in the future. This wouldn't apply at the point of receiving the gifted flat, but if they later went on to buy another UK property without selling the Suffolk flat, the new home would count as an 'additional property' and attract the higher SDLT rate. Lastly, you also need to consider capital gains tax (CGT). As a non-resident, you remain liable for UK CGT on the disposal of UK property, even when gifting it. The gain would be calculated as the difference between the property's market value at the point of transfer and its value when you acquired it. Certain costs associated with the transaction may be deducted, and it's likely that the annual exempt amount of £3,000 would be available, whilst depending on the level of gain, the tax rate could be up to 24 per cent. Where people often come unstuck is trying to manipulate the value of the property for tax purposes. HMRC normally expects that any transfer – whether by sale or gift – is assessed based on open market value. That means a professional valuation may be required. Artificially lowering the price could lead to tax complications and potentially penalties. In short, your children won't pay SDLT upon receiving a gift without a mortgage, but there are still IHT and CGT considerations. It's worth seeking tailored advice and a professional valuation to ensure all angles are covered properly. Check your inheritance tax position carefully Oliver Loughead, wealth manager at RBC Brewin Dolphin, replies: Transferring ownership of UK property to children is a significant decision that carries various legal, financial, and tax implications, particularly for individuals who are not resident in the United Kingdom. Regarding inheritance tax (IHT) treatment of the property, for a non-UK resident, IHT will normally be due on UK assets only (subject to new long-term UK residency rules) that exceed the available nil rate band (NRB), which is currently £325,000 per person. If you have a spouse or civil partner, it might be possible to make use of both of your available NRBs, so £650,000. Under UK law, a gift of property is typically treated as a potentially exempt transfer (PET). This means that if the donor survives for seven years following the date of the gift, the value of the gift may fall outside the scope of IHT. However, if the donor dies within that period, the value of the gift may still be brought into account for IHT purposes. In such cases, taper relief may apply, potentially reducing the amount of tax due depending on the time elapsed between the gift and the donor's death. If you have previously lived in the UK, you should check if you qualify as a long-term UK resident, as your worldwide assets may fall into scope for UK IHT. You are deemed a long-term UK tax resident if you have been resident for either the previous 10 consecutive years or a total of 10 years or more within the previous 20 years. Help with financial advice and planning Financial planning can help you grow your wealth, sort your pension, or make sure your finances are as tax efficient as possible. A key driver for many people is investing for or in retirement and inheritance tax planning. If you are looking for help sorting your finances and want to work out whether you need advice, planning, or coaching, the following links can help you understand more: >Do you need financial planning or financial advice - and is it worth it? > Financial advice: What to ask and how much it might cost > Are you retirement ready? Take our quiz and get financial planning help > Inheritance tax planning - what you need to know to protect your wealth Regarding concerns around stamp duty land tax, SDLT generally does not apply to gifts of property unless the recipient assumes a mortgage on the property. In cases where the transfer involves taking over an existing mortgage, SDLT may be charged based on the value of the outstanding loan. Therefore, the structure of the gift - especially whether the property is encumbered - must be carefully evaluated. Capital gains tax (CGT) should also be considered. Since April 2015, non-residents have been liable for CGT on disposals of UK residential property. A gift of property is treated as if the donor has disposed of it at market value, even if no money changes hands. This means that any increase in the property's value from its acquisition (or from April 2015 if it was owned before that date) to the date of the gift may be subject to CGT. Non-resident individuals must report and pay any CGT due within 60 days of completing the gift. The legal process for transferring UK property to children is complex. A UK-based solicitor should be instructed to handle the conveyancing and ensure all necessary documentation is completed, including a deed of gift or transfer deed. An often-overlooked aspect of gifting property is the potential loss of control. Once the property is legally transferred, the donor no longer holds rights over it unless specific conditions are attached, such as transferring it through a trust. Establishing a trust can be a useful mechanism to maintain some level of influence over the property while still achieving estate planning objectives. However, trusts introduce their own tax implications and legal complexity, so professional advice is essential before proceeding. In conclusion, while gifting UK property to children can be a valuable tool for estate planning and wealth distribution, non-UK residents must carefully assess the legal and tax consequences. Thorough planning, supported by expert advice from UK solicitors and cross-border tax professionals, is essential to ensure that such a transfer achieves the desired outcome without triggering unintended liabilities.
Telegraph
16-05-2025
- Automotive
- Telegraph
Britain's ailing councils are fleecing drivers
Is your council unfairly charging motorists? We want to hear from you. Email money@ On our street the sight of the postman is greeted with jubilation, such is the irregularity of his visits. But in our house the postie's arrival induces panic: has my wife received another penalty charge notice from the council? There goes another £35, or £70 if we forget to pay within a fortnight. More pain comes every April when the cost of our parking permit rises – it now costs a shade under £200 a year for the privilege of leaving our humble Honda Jazz on our potholed road. If anyone comes to visit, it costs £4.15 a day for them to park, too. And spare a thought for my colleague in London who has to pay £46 a day for a builder to park outside her house. Teetering on the edge of financial ruin, councils across Britain are now dangerously reliant on milking the dwindling number of us who dare to own a car. To be clear, I'm not a petrol head who hates public transport and cycling; quite the contrary. But for many people a car remains a necessity: my immediate neighbours include a disabled lady who walks with the aid of crutches, an electrician who must have a van for work and a teacher who needs to drive to a village school – or spend double the time walking and waiting for unreliable rural buses. New data from Cinch, an online car retailer, has found councils across the country collected £360m from residential parking permits over the past five years (the number would be higher but some authorities did not reply to the Freedom of Information request). My council, Brighton and Hove, came third in the list of local authorities ranked by revenue, raking in £28m from permits between 2020 and 2024. The others on the list were all London boroughs (see full table, below). But it's not only a London problem: Windsor and Maidenhead and Hampshire County Council have both more than tripled how much revenue they receive from permits in recent years. On top of permits for our own cars and our guests, we find ourselves paying ever-rising fines for often very minor infringements. A couple of years ago my council opened a new 'bus gate' and it caught out 38,500 drivers in one year alone. That one street generated £1.5m in fines. Is a £35 or £70 fine really appropriate for mistakenly going down a road that is perhaps 200m long? Of course not. The imposed 'low traffic neighbourhoods' – with their £130 fines, reduced to £65 if paid within 14 days – is yet another way drivers are being scalped. What happens to all this money? The 1984 Road Traffic Regulation Act makes clear that 'profit' from parking income must be spent on related costs, such as maintaining on and off-street parking. In Brighton, the council says any surplus generated by permits is 'spent on improving our local transport system for all'. But many suspect local authorities use the money taken from drivers on other projects. In 2013 the London Borough of Barnet lost a high court battle over its proposal to raise the cost of parking permits from £40 to £100 and visitors' permits from £1 to £4. At the time, Mrs Justice Land said the 1984 Act, which Barnet used to increase the charges, did 'not authorise the authority to use its powers to charge local residents for parking in order to raise surplus revenue for other transport purposes'. The next target is likely to be electric car owners, previously regarded as saints. Earlier this year, Dover District Council raised electric car parking permits by 162pc, from £40 to £105, in line with other types of vehicles. In Brighton permits are still £50 cheaper a year for electric cars. As more people ditch internal combustion engines, councils will either have to give up hundreds of thousands of pounds … or charge Teslas the same as a diesel van from the 1980s. No prizes for guessing what they'll choose.
Telegraph
15-05-2025
- Business
- Telegraph
Eight in 10 councils did not assess impact of second homes tax raid
Eight in 10 councils charging the second homes premium failed to carry out impact assessments before introducing the policy, The Telegraph can reveal. Critics said it 'beggars belief' that town halls did not take into account the economic impact of the tax raid despite government guidance recommending they do so. More than 200 authorities in England brought in a 100pc council tax premium on second home owners from April 1. They were handed the power to do so by measures brought in by the previous Conservative government in 2023. Government documents released at the time said: 'Councils should carefully consider whether to charge a premium and make an assessment of possible impacts, including on the local population, its communities and the local economy.' However, just 27 (19pc) of the 145 local authorities that responded to a Freedom of Information request sent by the TaxPayers' Alliance said they had produced an impact assessment. They included: Camden, Cornwall, Durham and the Isle of Wight. Authorities in so-called 'holiday not-spots' such as Bradford, Coventry and Preston were among those who failed to carry out an assessment. Critics have repeatedly questioned why such areas, which have low proportions of second home owners, require the policy. Kevin Hollinrake, shadow housing minister, said: 'We know the Government hasn't carried out its own assessment of the impact of this tax. So it beggars belief that councils aren't doing so either. 'Local residents are already reeling from higher bills, lower income and record taxes because of this punishing Labour government. This will make things worse, not better.' The Government has repeatedly made clear that it is for 'councils to exercise their own judgement on whether to apply a premium'. The Telegraph is calling for the second home council tax surcharge to be slashed or abolished. So far, our campaign has revealed that as little as 9p in every £1 generated from the raid is being spent on affordable housing. The Telegraph also found that 55 authorities are locked in expensive disputes with second home owners who had appealed their bills. John O'Connell, of the TaxPayers' Alliance, said: 'These latest revelations only further demonstrate how disastrous this policy has been, with taxpayers footing the bill for avarice of England's town halls. 'When designing this policy, ministers anticipated it would only be used in certain cases, and would be accompanied by impact assessments. Yet this has not been the case and in most of the country councils have simply used it as a naked cash grab. 'Labour now has a unique opportunity to reverse the harm done by the previous government and scrap this premium for the next financial year.' It comes after the Ministry of Housing, Communities and Local Government (MHCLG), run by Angela Rayner, came under criticism for refusing to investigate the national impact of the raid. In response to a question posed by Mr Hollinrake, the department said it was up to individual councils to decide if the policy was 'effective'. An MHCLG spokesman said: 'It is for councils to exercise their own judgement on whether to apply a premium and they should consider our statutory guidance on impacts and exceptions.' A spokesman for the Local Government Association said the second homes raid is a way of 'encouraging owners to bring these properties back into permanent use'. He added: 'However, we remain clear that council tax itself has never been the solution to meeting the long-term pressures.'
The Independent
14-05-2025
- Business
- The Independent
Council tax could more than double under London mayor's proposal
London Mayor Sadiq Khan is proposing allowing councils to more than double council tax on empty second homes to help alleviate London's housing crisis. He cited Nine Elms, in the city's southwest, as an example of a location with numerous unoccupied "gold brick" investment flats. "They've not been lived in, because those who bought it know equity will go up and the price of the flat will go up, and they don't need to live there," Sir Sadiq said. This proposal follows Khan's recent announcement of exploring development on London's green belt land due to high housing demand. He said that London needs 88,000 new homes to be built annually for the next decade.
