Emergency Budget: Capital Gains Tax to rise

uk1

JamesU wrote: »

Have a lot of time for John Redwood, balanced chap.


JamesU

I received a note from him ..... he is always prompt! .... and it occured to me reading it that the backbenchers might not have understood what the small print was until someone like me told them.

It is certainly worthwile explaining to as many as possible that Osborne has misled them.

uk1

John_Pierpoint wrote: »

Exchange of contracts.

Are you sure it isn't completion?

Gorgeous_George

JamesU wrote: »

As indexing/taper relief was removed with the inroduction of 18% CGT, presumably Labour were doing it too?

JamesU

But at 18% (which was better than the maximum taper relief allowance). The Tories will tax it at 28% and NO taper relief.

GG

John_Pierpoint

Q. I’m selling a property. What is the date of disposal?

A. Where you sell a property under an unconditional contract the date of disposal for capital gains purposes is the date on which you exchange contracts. Where the contract is conditional the date of the disposal is the date on which the last of the conditions is met.
Guidance is available in the Capital Gains Manual on conditional and unconditional contracts.

Gorgeous_George

Are the BBC being deliberately misleading?

<H2 id=story-heading-1>PROPERTY INVESTMENT - higher rate taxpayer

Graham is a higher rate taxpayer. He purchased an investment property which he hopes to sell at a gain of £95,000.
Had Graham sold the property on or before 22 June 2010 he would have paid CGT on the chargeable gain at 18% (i.e. £15,282). With effect from 23 June 2010 he will suffer CGT on this gain at an effective rate of 28% (i.e. £28,772). accordingly he will be worse off by £8,490.
PROPERTY INVESTMENT - basic rate taxpayer

David is an employee earning £25,000 a year, and is going to sell an investment property at a chargeable gain after his CGT annual exemption of £5,000.
As David's taxable income and chargeable gains are less than £37,400 he will be no worse off, because the 18% CGT rate remains unchanged for basic rate taxpayers

</H2>
Why different gains for a higher rate and lower rate taxpayer? If the lower rate taxpayer makes a gain of £95K he will pay 28% on most of the gain as he will become a higher rate taxpayer. The gain may have been accumulated over 30 years and be entirely due to inflation.

Just a con form the Cons.

GG

JamesU

Gorgeous_George wrote: »

Are the BBC being deliberately misleading?

</H2>
Why different gains for a higher rate and lower rate taxpayer? If the lower rate taxpayer makes a gain of £95K he will pay 28% on most of the gain as he will become a higher rate taxpayer. The gain may have been accumulated over 30 years and be entirely due to inflation.

Just a con form the Cons.

GG

Labour started the con by removing the indexing/taper relief when introducing 18% CGT and were responsible for started the ball rolling with CGT on inflation. And yes, initially people were better off paying less CGT than at 40% with reliefs. But it was a stupid mistake by Labour to do it this way in the first place. Now the new party is capitalising on this with increased CGT rates on top of this without reintroducing some form of indexing. Outrageous for prudent investors planning for long term retirement, but both parties ignoring the problem and not finding the right balance

JamesU

jamesd

Long term property owners who let the property can get still get private letting relief on up to £40,000 in capital gain, I assume? The example on that page shows a £70,000 gain with a combination of primary residence and letting relief eliminating all CGT.

Private landlords might want to join local associations and consider swapping properties with other landlords to minimise the accrual of gains. The exchange and any cash used to cover a value difference would be a disposal and would trigger the CGT calculation and ability to claim the reliefs, presumably making it possible to eliminate CGT liability.

Ricardoro

John_Pierpoint wrote: »

Q. I’m selling a property. What is the date of disposal?

A. Where you sell a property under an unconditional contract the date of disposal for capital gains purposes is the date on which you exchange contracts. Where the contract is conditional the date of the disposal is the date on which the last of the conditions is met.
Guidance is available in the Capital Gains Manual on conditional and unconditional contracts.

John

can you post a link please to this Q&A?

Thanks

Richard

Gorgeous_George

Ricardoro wrote: »

John

can you post a link please to this Q&A?

Thanks

Richard

Ever heard of Google?


Link

GG

Ricardoro

Thank you Gorgeous for the link; however your sarcastic question about Google was unnecessary and frankly out of place on a Forum like this.

For your information I had already googled and also searched for "date of disposal" on the HMRC website, neither of which led to these Q's and A's.

Richard