30 Aug 2024
By: Heather Needham

Real Estate, Real Talk

PROPERTY PROFESSIONALS GATHER FOR A POST ELECTION NETWORKING LUNCH

On a (rare!) sunny July day, the property community in Surrey gathered at the West Surrey Golf Club in Godalming for the ever-popular Property Professionals Lunch.

Hosted by leading law firm, Penningtons Manches Cooper, the lunch was attended by over 80 guests from a mix of businesses in the property sector including developers, housebuilders, accountants, agents, banks, planning consultants and solicitors.

A delicious barbecue was served, and guests dined on the golf club’s sunny terrace which overlooks the sweeping lawns of the beautiful scenic course.

David Graham-Smith, a senior property consultant at Penningtons Manches Cooper, welcomed newcomers to the lunch and thanked regular attendees for their continued support.

With the lunch just two weeks’ after Labour’s victory at the General Election, and on the day of the King’s Speech where the new government’s legislative agenda is outlined for the coming year, politics were on people’s minds.

Labour’s manifesto focused on ‘Change’. But what does that mean for the property industry? Newspaper headlines have talked about loosening of planning red tape and less power being afforded to residents to block local applications, and David remarked on the familiar slogan ‘Take Back Control’ being used to describe this promise. Labour has also pledged to build 1.5 million homes over the next five years.

Whilst there are positive signs for the property industry, what about tax and what was excluded from Labour’s manifesto?

To try to answer that question, David introduced the assembled guests to Lucy Saunders and Thomas Harrison from top accountancy firm, BDO.

Lucy is a tax partner in BDO’s private client division in Guildford. She works with high-net worth individuals and their families to help them navigate the increasingly complex tax landscape and advises them on succession and estate planning matters, matrimonial matters and property. Thomas is an associate tax director in Lucy’s team, specialising in private client tax with a particular focus on Trusts, Inheritance Tax and succession planning.

Lucy outlined her thoughts on what might happen with the tax regime in the UK and like many observers, believes that tax changes will almost certainly come down the line. Via the Labour Manifesto, the Prime Minister had committed to just one major fiscal event each year. Lucy suggested that there was unlikely to be an Emergency Budget and it is expected that the first Budget of the new Government will be in the Autumn. This has since been confirmed and scheduled for 30 October 2024.

Lucy noted that, on 1st August, the Bank of England would meet to decide on interest rates which may drive policy changes.

On the whole, Labour supported the changes that were proposed by the Conservative Party in March 2024 in relation to the UK tax treatment of non-domiciled individuals and these changes were set to be effective from April 2025. Lucy thought that was perhaps an ambitious deadline as there is a lot to consider. Rachel Reeves, the new Chancellor, has suggested that they are still working towards this date.

Thomas then took to the podium and said that it was hard to predict what’s coming down the line. There wasn’t much detail in the manifesto on capital gains tax and so should we expect to see a rate rise? Labour has also pledged not to increase National Insurance, VAT or income tax but has been silent on capital gains tax!

We do know that private schools will have to pay VAT and business rates under the new Government. This has since been confirmed and will be effective from January 2025.

On stamp duty land tax, the manifesto proposed a 1% increase to the stamp duty land tax surcharge (currently 2%) paid by non-resident individuals when purchasing UK property. Changes to council tax bands are not proposed, although an introduction of an annual levy on second homes used as holiday homes empowers councils to tax vacant properties and proposes a new levy on foreign companies buying UK housing.

Questions were opened to the floor and David closed the speech to thank all those who had participated and helped stage the event.

The next lunch is in November by which time we should have more details on tax in the Budget and how it’ll affect businesses, individuals and the property sector. For more information about the event, please contact business development manager Caroline Barry (caroline.barry@penningtonslaw.com).

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