Capital gains tax rates are set to stay the same for at least five years or at least the life of this Parliament, according to Chancellor George Osborne.
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Brits who were illegally charged capital gains tax when selling a home in Spain have just one month left to make a claim for a refund.

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The world’s not going to end just because property investors face a hike in capital gains tax.

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Chancellor George Osbourne has set the date for new government’s emergency budget as June 22, 2010.

Property investors should expect new guidelines and rates for capital gains tax on buy to lets, furnished holiday lets and second homes.

The tax status of holiday lets may also change.

Families who have settled inheritance tax bills based on property prices at the time of their loved one’s death may have a case to claim back thousands of pounds in overpaid tax if the price drops.

Special rules in the HM Revenue and Customs tax manuals for inspectors show that families can reclaim tax with the sale of land relief rules.

These rules say an ‘appropriate person’, who is generally an executor of the estate, can ask for the value on death used to calculate inheritance tax to be switched to the actual sale value of the property if the claim is made within four years of the death.

With inheritance tax charged at 40%, this amounts to a tax saving of £400 for every £1,000 downward adjustment of a property’s value.

Falling house prices mean most properties have lost somewhere between 12% – 20% of their value over the past two years despite slow increases in value over recent months.

HMRC will only accept claims if the sale value is either  £1,000 or 5% below the value on death, whichever is the least.

The relief works like this:  T died in August 2007. T’s house was valued for probate at £200,000.

In December 2009, T’s executors sold the house oin the open market for £150,000.

The executors claimed sale of land relief. The date of death value of the house for IHT was reduced to £150,000.

Because the £50,000 was more than £1,000 or 5% of the value on death (£10,000), the claim was allowed saving £50,000 x 40% in inheritance tax, or £20,000.

• Before making any claim, discuss the circumstances with an estate planning professional as this article is based on general advice that may not suit everyone’s personal financial affairs.

Capital gains tax is set to double on second homes and personal ‘non-business’ assets from 18% to nearer 40% when the Con-Dems announce their first Budget around the end of June.

Under current tax rules, this means CGT on buy to let investment property will go up in line with the top rate.

Tax on business assets – currently including furnished holiday lets – will benefit from reduced CGT through entrepreneur’s relief.

The plan to increase the inheritance tax threshold to £1 million is dropped, but the Lib-Dems have agreed to abstain from any vote in this Parliament for any Tory proposals to bring in tax relief for married couples.

Both sides have set ‘within 50 days’ as the date for the next Budget.

The best comment on this election is whether the next prime minister needs a house in multiple occupation licence for 10 Downing Street.

If so, the local council will have to judge home a ‘fit and proper’ person to manage the government.

In seriousness this election does not really mean much to property investors.

The only sure thing for buy to let landlords, property investors and developers is house prices are likely to stay flat while taxes and mortgages rates are hiked up gradually over the coming year or so.

Whoever sits in the big chair at No 10 really doesn’t have a choice – they have to raise taxes to pay for the economic crisis Labour and the banks dumped on the country. Gordon Brown was a dead man walking after picking up the poison chalice of government from Tony Blair. The poor guy was pretty much battered by the system and he didn’t know how to react other than to lie down and take it.

The next incumbent will have to deal with raising taxes and making cuts.

It’s a bit like rearranging deck chairs on the Titanic.

Capital gains tax (CGT) is likely to be a casualty.  The current rate of 18% does not make sense – it’s got to be tied back in with a rate that’s the same as the taxpayer’s highest rate because it just doesn’t make sense to sell investments at a lower tax rate than the general rate of income tax.

Property investors who want to dispose of homes should look at sealing the deal before the first post-election budget that is predicted within 60 days. The clock is ticking to take advantage of the low CGT rate.

Inheritance tax is the next big hitter. The Tories have indicated during their campaign that the threshold will rise to £1 million.

Houses in multiple occupation (HMO) are an interesting one. David Cameron has gone on record as intending to repeal the new planning and licensing rules that were introduced on April 6. This would be a major reversal of policy after Labour hung so much stock on demonising landlords with the new regulations.

If HMOs go, it’s likely the online ‘rate your landlord’ web site will be another casualty as well.

Likewise, furnished holiday lets need action too. The current rules run out on June 30 and the Tories successfully negotiated the removal of Labour’s new holiday let tax laws from the last Budget. There seems little point in supporting second home and holiday let owners in the run up to a vote only to forget the promise afterwards.

Property investors who have received a letter from the taxman asking for a call about unpaid tax on income from property letting, then you need to speak to a property professional like Property Investment Expert.

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Special Purpose Vehicles and self builds are the latest tax loopholes saving property buyers a fortune by paying less stamp duty.

SPVs are companies or trusts that are set up for the sole purpose of owning a specific property – often a commercial building like a factory, warehouse or retail premises but more frequently houses and flats since the recent stamp duty changes.

The SPV buys the property and then the SPV is sold to the purchaser.

The net effect is stamp duty is charged at 0.5% on the purchase of shares in an SPV rather than at the full rate of stamp duty.

One of the most expensive properties on the market in London is a five bedroom house in Knightsbridge with a tag of £6.95 million.

Putting them property in to an SPV could save the buyer about £240,000 in stamp duty.

Paying le3ss stamp duty with an SPV is not for every property buyer – the process does incur costs in setting up the company to hold the property that do not make the arrangement practical for cheaper property purchases, but then they attract a lower rate of stamp duty anyway.

Another  stamp duty work round that everyone can profit from is a self build.

Buying the land and building the property yourself means stamp duty is only paid on the purchase price of the land and not the final value of the home built on the land.

Providing this is less than £250,000 and you are a first time buyer, this is nil.

The taxman is reportedly eying these solutions to pay less stamp duty and the corresponding  loss of revenue, but as yet, no action is in place to close the loophole.

Property developers and investors who run furnished holiday letting businesses can get some extra help on how to account for losses and pay less property tax from a new help sheet from by HM Revenue and Customs (HMRC).

The sheet explains how to carry back trade losses for the 2009-2010 tax year – which ended on April 5 and is the tax year covered by the current round of self assessment returns.

The advice should not be used by buy to let landlords because although they may carry on a property business, letting property is not a trade under tax law, so different rules apply to setting off losses.

The new help sheet covers the self employed or business partners who fill in the relevant parts of the self assessment tax return.

If you are a property professional and need help with your property accounts and self assessment return, call Property Investment Expert on 01766 780165 (Mon – Fri 09.30 am until 5.00pm)

Click here for more tax return information for property investors

Click here to download a copy of the new guidance from the HMRC web site