After the barrage of complaints from the UK’s small business community following Chancellor Alistair Darling’s announcement late last year of an 18% flat rate of Capital Gains Tax 9 (CGT), a major change to the regime was announced in January. This sees the introduction of a 10% ‘entrepreneur relief’ on any capital gain up to £1 million.

However, this recent change does not offer any help to the UK’s largest group of entrepreneurs – buy-to-let landlords. As the Daily Mail pointed out, the example on Her Majesty’s Revenue and Customs (HMRC) website explicitly excludes property letting.

This means that on the sale of a property, they will still need to pay 18% on any gain made above the £9,200 CGT limit for this financial year.

There are, however, many ways in which buy-to-let landlords can reduce their CGT liability. The key is to understand the rules from day one and plan accordingly. For example, married couples can use both their CGT allowances and investigate principal private residence rules.

But every situation is different, and it is important to get the personal advice of an expert in the field, such as a specialist tax lawyer. Anyone wishing to make plans for reducing the amount of CGT they might pay should contact Mercers private client department on 01491 572138 to discuss their circumstances.