Capital Gains Tax (CGT) currently set at 18% for all non-business asset sales, could soon rise to  40% or even  50% under plans mooted by the new coalition government.

Since the idea was proposed, estate agents have reported a deluge of enquiries from panicked landlords, anxious about what such changes could do to their profits.

“The last thing we want to see is a big sell-off of rented property,” argued Richard Price, Director of the National Landlords Association. “The proposed capital gains tax changes could have a hugely detrimental effect on the rented property market”.

Landlords hoping to dodge the CGT increases must advertise their properties on the market as soon as possible. By instructing solicitors quickly, many landlords could avoid the potential tax rises.

Aside from landlords, individual’s tax-free CGT allowances could also be slashed for those paying basic rate tax.

Approximately 130,000  taxpayers currently pay CGT  amounting to £2.5 billion in tax every year. Basic-rate taxpayers can currently realise gains of  £10,100 every year without paying CGT but it is reported that this allowance could be dropped down to £2,500 in order to help plug the public debt.

Small investors who purchased shares during the privatisation boom of the 1980’s should also consider how the government’s changes will affect future sales, while workers on Save as You Earn schemes may also be affected.

While CGT hikes are yet to be timetabled, financial experts and commentators are predicting April 2011 as the likely date for any changes to take effect.

If you are hoping to avoid the potential tax rise it would be wise to approach your solicitors and financial advisors without delay.