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TODAY'S OTHER NEWS

CGT Threat: Propertymark warns government not to hurt buy to let

Propertymark is the latest industry body to warn the government against Capital Gains Tax changes that may disincentivise landlords.

A joint statement from the ARLA and NAEA wings of the association says: “The government need to tread with care with the review into the capital gains tax system and all consequences, whether expected or unexpected, need to be considered. 

“If the review includes allowances too, which would be sensible, then as with the recent stamp duty changes, taking people out of the tax equation should be an aim too. 

“Increasing rates further for investment properties could reduce appetite from landlords who provide vital housing to the private rented sector, which will have a detrimental impact on supply.”

There is growing concern in the sector that the current review could add to the tax attacks made on landlords in recent years.

Chancellor Rishi Sunak has requested a review of CGT rules from the Office for Tax Simplification.

The OTS has published an online survey and a "call for evidence" to seek views regarding CGT, with the consultation closing on October 20. 

This would mean new CGT rules, taking into consideration the consultation, could be presented at the autumn Budget expected in November.

According to the Treasury the consultation aims to "hear directly from individuals and businesses" as well as "professional advisers and representative bodies" about which aspects of capital gains tax are "particularly complex and hard to get right, and to hear any suggestions for improvements”.

CGT is  currently charged at 28 per cent on the sale of second homes and buy-to-let properties, and in 2017-18 300,000 people paid the tax, generating almost £60 billion.

  • Barry X

    Being out of his depth, as he lacks experience, I expect Rishi Sunak will approach an adviser in the Office of Tax Simplification (that reports directly to the Ministry of Truth).

    They will recommend that, to "simplify" tax he should charge CGT for sales of BTL properties at 100% of the actual sale price so no calculation will be necessary. That - he will be told - will be "simpler" and "fairer" (as Shelter, who will be the only "representative body they need to "hear from" will agree).

    Rishi will say "thank you very much, that sounds fair and a lot simpler", then he'll check with Bozo. The big cuddly bear, who has lied to and betrayed every woman stupid enough to ever have become a temporary part of his life - which was good practice and training for him so he already had years of experience and knew exactly how to treat the whole country and especially any landlords stupid enough to still try to make a living in the UK....

    BJ will then rush around jovially saying "lets get Tax Simplification Done" - meaning let's "Do" the Landlords good and proper - and that will be that.

  • Ashley Beaver

    Gosh, it's shocking isn't it, I don't fancy my prospects in the long run, I'll be selling up and getting my money into something less bricks and mortar. I looked at REIT but their a bit of an unknown, how much market risk they factor in isn't that transparent.
    I see a strong CGT system that will release a significant portion of landlord wealth for governments disposal. It's largely justified in light of the cost of everything over the last 6 months.
    I keep reminding myself that it's just another economic cycle and placing my wealth somewhere else is the prudent thing to do.

    Paul Barrett

    It is NOT just another economic cycle.
    The attacks on the PRS are unprecedented.
    These supposed gains will have been achieved by LL paying S24 expenses and all tbe other unnecessary costs imposed on LL.
    If you worked out all the additional costs against alleged gains there wouldn't be many gains remaining.
    But those costs aren't offset against CG.

    So the LL is paying far more tax as the CG is just a fantasy.
    Any gains are actually substantially lower.

    But the CGT system doesn't take these effective losses into account.


    Increased CGT on LL is easy for Sunak to apply.
    It is the lowest of low hanging fruit.

    He just has to find ways of forcing LL to sell up.
    S24 is one of them.
    He will need to find others to force LL to sell.

    Making the eviction system impossible is one of them he is trying.
    That should get rid of a few more LL!

    Make no mistake he is coming for LL big time.

    He won't consider other victims until he has drained the CG of the PRS achieved this past 20 years.

    The PRS is where the money is.

    Once done there as rumoured he may abolish the PPR tax free status on properties with a value in excess of £500000.

    Anyone with assets is going to be hit with additional taxes because the vast majority of the population doesn't have any assets so not electorally damaging doing over LL!!

     
  • Barry X

    The thing most people forget is that so call "capital gains tax" (CGT) is NOT about real gains anyhow.... its mainly a tax on INFLATION if you look properly at it and/or think carefully about it.

    Once upon a time there used to be a thing called "indexation" that was supposed to subtract inflation from the "gain" to work out the real gain. That was abolished so there is nothing even attempting to *look* slightly fair about it.

    Imagine if you bought a warehouse full of tins of beans a few years ago, say 100,000 of them at 30p a tin. That was was £30,000 in total. Then - ignoring sell by dates and things (this is a thought experiment) - you wait 10 years and now a tin of beans costs, say, 65p, so you sell all your tins for a total of £65,000

    The government then taxes you on your "profit" (or "gain") of £35,000 and after you've paid the tax you don't have enough money left to buy another 100,000 tins of beans.

    Did you really make a profit, or in reality after tax was it a complete waste of time, fool's errand and solid unmitigated loss?

    Well, that's CGT for you! And now they're thinking that we're so used to it we'll think it fair that the landlords (who are all extraordinarily wealthy landowners rolling in cash) won't mind "supporting the poorest most vulnerable people in their communities (or some such emotive crap) by "contributing a fairer share", i.e. being robbed, bled, fleeced, plucked and roasted even more!!!!

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