Landlords and businesses are rushing to transfer and liquidate assets ahead of a potential Capital Gains Tax hike in next week’s budget.

Property law firm Thackray Williams has seen a surge in demand over the last couple of months from nervous clients, with a more than 200% increase in enquiries from those looking for tax advice, especially around transferring assets out of their names to take advantage of the current rates of CGT.

It has been widely predicted that Rachel Reeves will increase CGT, potentially from its current rates which range from 10 to 28% to as much as 39%, although government sources have indicated she could leave the rate on the sale of second homes and buy-to-let properties untouched.

The firm says clients looking to bring forward plans to transfer assets away is feeding directly into increased work for the real estate sector, with high levels of both homeowners and businesses trying to sell.

50% increase

“We have seen a 50% increase in instructions in the last three months, compared to the same period last year,” says real estate head Vikki Herbert (main image). “We also have a number of transactions with a deadline of 29th October.”

Unless landlords have sold and completed the sale of a property on or before that date, they would be subject to a new rate, she says.

“With many property investors nervous about the implications of leasehold reform and new renters’ rights, an increase in CGT may well accelerate decisions to disinvest,” explains Herbert.

“There is therefore a strong possibility of a glut of properties coming on the market as landlords and commercial property owners try and complete sales before any future increase. As we saw with the property boom in the pandemic, this can create bottlenecks, which still might make it ambitious to complete in time.”