New government policy: Will buy-to-let investors lose out?

dealsearcher

chucknorris wrote: »

I think it's obvious that at some point a sort of taper relief system will be introduced, maybe not immediately but almost certainly at some point. If it mirrors the old taper relief and eventually gives 50% relief than this effectively will cut CGT in half.

That would be a fair way to go. People who bought property ten years ago could not have forseen such a change in CGT rules.

The point of the Lib Dem policy was to get around the loop hole of hedge fund managers paying just 18% tax when their cleaners were paying 20% tax. It was not intended to hit the buy to let owner.

Thrugelmir

dealsearcher wrote: »

That would be a fair way to go. People who bought property ten years ago could not have forseen such a change in CGT rules.

Yet they could have a pocketed a bigger profit in the interim period. As CGT was 20% in 2000.

chucknorris

Thrugelmir wrote: »

Yet they could have a pocketed a bigger profit in the interim period. As CGT was 20% in 2000.

I thought it was taxed at the marginal rate of income tax since 88-89? Which really means for significant gains it will be no different at the new 40%.

If you are saying they should have sold at the top of the market (2007) then that assumes 2 things:

1. That you know when the top of the market is (some wrongly guessed as early as 2005)
2. That your objective is to try and sell at the top of the market rather than holding as a decent ongoing investment

It also ignores the 'super profits' for investors on trackers that looks like turning into a rather large number of years.

For me sellling is about retiring (or perhaps never)

abaxas

chucknorris wrote: »

I thought it was taxed at the marginal rate of income tax since 88-89? Which really means for significant gains it will be no different at the new 40%.

If you are saying they should have sold at the top of the market (2007) then that assumes 2 things:

1. That you know when the top of the market is (some wrongly guessed as early as 2005)
2. That your objective is to try and sell at the top of the market rather than holding as a decent ongoing investment

For me sellling is about retiring (or perhaps never)

What I never understand is the 'it's my pension brigade'.

When you are 70, most people simply wont be bothered to run a BTL.

chucknorris

abaxas wrote: »

What I never understand is the 'it's my pension brigade'.

When you are 70, most people simply wont be bothered to run a BTL.

Which is why my main plan is to retire in my 60's (I'm 52 now) sometime coinciding with a good time in the market. But I'll see how I feel at the time. It is my pension but sold and will be a pension in cash.

Harry_Powell

abaxas wrote: »

What I never understand is the 'it's my pension brigade'.

When you are 70, most people simply wont be bothered to run a BTL.

Just get a 'fully managed' option from an estate agent/management company. It costs more in fees, but you don't have to lift a finger.

nollag2006

chucknorris wrote: »

Which is why my main plan is to retire in my 60's (I'm 52 now) sometime coinciding with a good time in the market. But I'll see how I feel at the time. It is my pension but sold and will be a pension in cash.

I am in my mid-thirties, and hope to buy another one or two BTLs before 40.

It would allow me a decent income stream in my 60s and then a nice lump sum once I cant be bothered to run them any more.

chucknorris

nollag2006 wrote: »

I am in my mid-thirties, and hope to buy another one or two BTLs before 40.

It would allow me a decent income stream in my 60s and then a nice lump sum once I cant be bothered to run them any more.

That was exactly my thinking back in 1991 and it hasn't changed. There is always Harry's option of using an agent, but I think in 10 or so years I would just want a clean break and live 6 months a year in Spain

chucky

here's another question that sounds very interesting...

if you have a Ltd Co and that Ltd Co owns a property or a number of properties.
when you go to sell the properties why don't you sell the Ltd Co - that way the buyer doesn't pay Stamp Duty for the properties. therefore you can negotiate an increased return.

is that correct?

tomterm8

There is stamp duty on shares, too, but you're into the realm of complex accounting, where all the rules are likely to change with the budget.