U-Turn on Capital Gains Tax????

Masomnia

1984ReturnsForReal wrote: »

Tories = Rich = Less Tax


Simple Maths

Tories = Want to incentivize work, investment, competitiveness and economic growth = less tax.

Simple economics.

Generali

Kohoutek wrote: »

Not surprising really - 50% would be one of the highest rates of CGT in the world.

A quick look on Wikipedia shows that even in countries such as France, Sweden and Denmark their CGT rates are significantly lower at 30%.

http://en.wikipedia.org/wiki/Capital_gains_tax

According to what I've seen it would only apply to houses which are not the PPR, not to other assets such as shares or business assets.

kennyboy66_2

Generali wrote: »

According to what I've seen it would only apply to houses which are not the PPR, not to other assets such as shares or business assets.

I think the subtext is that by chance or by design, the environment in the last 15 years have been hugely favourable to BTL and HPI and the outcomes (over supply of flats, high house prices, Northern Rock, etc etc) have been a disaster.

In an ideal world there would be modest deflation in house prices, more transactions and policies that favoured home owners over BTL.

Fiendishly difficult to engineer all that, unless planning restrictions are changed markedly.

Harry_Powell

Degenerate wrote: »

They should just bring back the old regime with marginal rate + taper relief. It was one of the most pointless and counterproductive changes Labour made.

Totally agree, it seemed towards the end of Labour's tenure that they had completely run out of ideas, but felt they still had to be seen to be doing something. Hence the reduction of CGT and the abolishment of the 10% tax threshold, both unnessary and counter productive.

Generali

kennyboy66 wrote: »

I think the subtext is that by chance or by design, the environment in the last 15 years have been hugely favourable to BTL and HPI and the outcomes (over supply of flats, high house prices, Northern Rock, etc etc) have been a disaster.

In an ideal world there would be modest deflation in house prices, more transactions and policies that favoured home owners over BTL.

Fiendishly difficult to engineer all that, unless planning restrictions are changed markedly.

Fundamentally, the idiotic planning laws of the UK should change to allow people to build the houses people want in the areas they want to live. The three bed semi with a decent garden should go back to being the basic house being built and countryside should be built on to accomodate this, especially around London. The Green Belt legislation* is the single biggest economic disaster to befall the UK IMO, even including the 1970s trade unions and Gordon Brown.

The reason so many new builds are rubbish is because the planning laws are such that there is a massive skew towards big buidling firms with big legal departments. I read once (no idea if it's true) that the big building firms in the UK spend more on lawyers than on architects!









*Town and Country Planning Act 1947.

kennyboy66_2

Generali wrote: »

Fundamentally, the idiotic planning laws of the UK should change to allow people to build the houses people want in the areas they want to live. The three bed semi with a decent garden should go back to being the basic house being built and countryside should be built on to accomodate this, especially around London. The Green Belt legislation* is the single biggest economic disaster to befall the UK IMO, even including the 1970s trade unions and Gordon Brown.

The reason so many new builds are rubbish is because the planning laws are such that there is a massive skew towards big buidling firms with big legal departments. I read once (no idea if it's true) that the big building firms in the UK spend more on lawyers than on architects!

*Town and Country Planning Act 1947.

They employ architects ?

1984ReturnsForReal_2

Masomnia wrote: »

Tories = Want to incentivize work, investment, competitiveness and economic growth = less tax.

Simple economics.

It can't be that simple if you can't get the maths right.

You have less tax at the end of your equation.

What they are doing is bringing it towards the front of the equation without including the variables.

Its much more complicated than you or they would have you believe.

Lets hope they have done the calculations. Which I doubt..

JP45

The following extract from today's Telegraph provides further clues (the highlighted bits) as to what the Government has in mind for CGT:

The coalition agreement signed by the two parties committed them to "seek ways" of increasing CGT. A Treasury document released to coincide with the Queen's Speech yesterday removed any ambiguity about the plan, with a definitive statement that the CGT rate will rise. It read: "Capital gains on non-business assets will be taxed at rates closer to those applied to income tax."

That means the levy could rise from 18 per cent to 40 per cent or even 50 per cent. Treasury officials are principally concerned with targeting private equity bosses and other City high-fliers who are suspected of using CGT as a way to avoid paying higher levels of income tax.

But increasing CGT will also hit those who have put money into property or shares which they planned to sell to help fund their retirement.

One in six families in Britain, a total of 3.75 million people, owns shares. In addition 250,000 families own a second home and there are a million buy-to-let properties.

Some accountants have suggested that as many as a million people a year will be caught by the increased tax rates when they sell such assets. The move was described as "legalised theft" by some accountants.

Experts also warned that if the CGT threshold were lowered from the current £10,100 to the expected new level of £2,500, the number of people forced to pay would rise from 130,000 to 500,000.

Many of those caught in the net would be shop floor staff who bought shares in their own company as part of save-as-you-earn schemes.
Fears about the impact of the tax rise have led to panic selling, with research indicating that 60 per cent of financial advisers planned to move their clients away from assets that attract capital gains.

Some research has suggested the CGT rise will actually reduce the government's tax revenues because those who hold property or shares will be less likely to sell.

However, in an apparent shift in the coalition's language, the Treasury no longer referred to CGT rates as being "similar" to those applied to income, instead saying "closer". Some Conservative backbenchers took that as a sign that ministers may yet keep the new CGT rate well below 40 per cent. Last night, Treasury sources did not rule out some concessions, saying that ministers were examining "all options".

Supporters have pointed out that returning CGT to a rate of 40 per cent would not be a complete shock for taxpayers, as it was only reduced from 40 per cent to 18 per cent around two years ago.

It was understood that the Treasury may move away from a single rate of CGT in order to impose different levels on "ordinary" people with modest investments compared with wealthy financiers.

dealsearcher

If the government does increase the CGT rate to the level that is being stated in the media then the tax take will indeed decrease and not increase. Selling property or shares is discretionary and transactions will just dry up. People who have to sell their shares will have done so before 22 June. Others will move out of capital investments - as 60% of financial advisers are doing with their clients funds.

This is not going to bring in any amount of tax. Those that are 'glad' that the so called rich are being hit by this are just suffering from the politics of envy. If the government is just pushing this through to appease these people then more fool them.

1984ReturnsForReal_2

dealsearcher wrote: »

If the government does increase the CGT rate to the level that is being stated in the media then the tax take will indeed decrease and not increase. Selling property or shares is discretionary and transactions will just dry up. People who have to sell their shares will have done so before 22 June. Others will move out of capital investments - as 60% of financial advisers are doing with their clients funds.

This is not going to bring in any amount of tax. Those that are 'glad' that the so called rich are being hit by this are just suffering from the politics of envy. If the government is just pushing this through to appease these people then more fool them.

I think its actually aimed at those that run their own business pay themselves the minimum below income tax threshold & the rest in divs...