A business consultancy is warning that buy to let sellers in the current market are likely to be squeezed – and may end up paying more Capital Gains Tax than they expected. 

The Hargreaves Lansdown consultancy says house price rises averaging over 10 per cent annually according to multiple indices, matched with a freeze on the CGT threshold, means that buy to let investors achieving a liability of more than £12,300 in a single year, will pay tax. 

Hargreaves Lansdown says this is actually just one of many ways that individuals are likely to be paying more tax from next month.

The others are the much-publicised rise in National Insurance; the effective increase in income tax payments because of frozen thresholds; a rise in divided tax; increasing council tax; higher stamp duty on house purchases because of capital appreciation; and finally an effective rise in inheritance tax because of a freeze on allowances. 

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, says: “This April, just as we’re reeling from horrendous price rises, the taxman will wade in to deliver another terrible blow. It’s not just the horrible National Insurance hike and the miserable dividend tax rise, there are actually eight ways we’ll pay more tax, so it’s worth taking steps to ensure we don’t end up paying more than our fair share.

“The amount of tax we pay almost doubled between 2001/2 and 2019/20. 

|It fell back during the pandemic, but January figures show it bouncing back with a vengeance. Unfortunately, this is just the beginning: the new tax year will see taxes soar, as we inch towards the highest tax burden since the 1950s. It means we need to understand where the tax pressure will come from, and how to protect ourselves.”