A leading figure in the lettings sector sends out a stark warning to the government do not introduce further ‘stealth increases’ on Inheritance and Capital Gains taxes.

The industry figure says: “The Conservatives have always been known as the property-owning party, but they now seem in danger of damaging this reputation as they seek ever more punitive means of balancing the books.

“Voters have long memories and these moves, if implemented, will impact people over the period of the next general election so Government needs to be aware of the potential consequences of these actions at the ballot box.”

His demands come after breaking news in the Financial Times that allowances on property taxes including CGT and Inheritance Taxes will be frozen in the November Autumn Budget.

The paper states this will be part of the major Tories’ plan to claw back the ‘Black Hole’ devastation of public finances.

If introduced this means the inheritance tax ‘nil rate band’ will be extended from 2025-26 to 2027-28.

Last year when Sunak was chancellor he announced his plan to freeze the inheritance tax threshold to 2025-2026. Now that inflation has reached double figures this has raised for ‘funds’ for the HMRC more than expected and the further extension of the freeze will line its pockets even more.

Inheritance Tax is paid at 40 per cent on the value of the estate of the present nil band rate of £325,000 first introduced in 2009, and for couples £650,000.

However in 2017, the government introduced a new “transferable main residence nil rate band of £175,000” on homes which are left to the deceased’s children.

The FT says the government could take a similar approach for CGT raising  ‘contributions to HMRC coffers by introducing another ‘stealth tax’.

The Financial Times article says:“[Chancellor Jeremy] Hunt is likely to extend the current freeze on the CGT annual exempt amount of £12,300 from 2025-25 until 2027-8” says the FT, which also warns that Hunt is increasing capital gains tax paid on shares and second homes.

The PRS spokesperson responsed, saying: “While nobody denies that the Chancellor has tough decisions to make it does seem harsh to single out homeowners for particular, and repeated, punishment. The Conservatives need to be wary of becoming the party that taxes homeownership, that hits savers, and punishes hardworking people for providing a roof over their heads and a home for their families.

“Property investors and second homeowners will also be hit with a further freeze on the CGT allowance on second homes and rental properties. Again, many may feel this is justified but the truth of the matter is that punishing people for investing their wealth in property is not a good look for the Conservatives.”