Emergency Budget: Capital Gains Tax to rise

Hotscot

uk1, your comments are very persuasive and my "optimism" is actually me being diplomatic. A head-on assault is unlikely to achieve results unless this becomes a Gainsgate scandal, unthinkable, I suggest, in the present circumstances. We desperately need leaders we can trust. I shudder to think of the consequences of what you write. I'd rather play the dumb guy meantime. It's not easy, though.:o

Hotscot

By the way, does anyone know of an effective pressure group for the retired/elderly that is already working on this or could take it up in a fight for "fairness"?

uk1

Hotscot wrote: »

uk1, your comments are very persuasive and my "optimism" is actually me being diplomatic. A head-on assault is unlikely to achieve results unless this becomes a Gainsgate scandal, unthinkable, I suggest, in the present circumstances. We desperately need leaders we can trust. I shudder to think of the consequences of what you write. I'd rather play the dumb guy meantime. It's not easy, though.:o

The problem is that they already have "form" elsewhere.

The deception concerning upgrades for pensions meant that they could have included RPI in the basket of 3 (or 4) but by substituting CPI they reduced increases. It's inconceivable they didn't know this. Even with your goodwill one error is suprising but two is inconceivable. Who knows what else there is?

uk1

Hotscot wrote: »

By the way, does anyone know of an effective pressure group for the retired/elderly that is already working on this or could take it up in a fight for "fairness"?

If you are sufficiently interested this is the moment of power for both Conservative and LibDem back benchers who will weild unprecedented un-whipped power.

Lobby groups are not as useful as you can be. Identify those backbenchers of either party who support your gripe and e-mail them on their parliament email address. Email as many as you can identify. Individuals (public and MPs) have more influence today (not saying much I know) than ever before because of the frailty of the coalition.

TM1976

uk1 wrote: »

Take a couple who are informal property developers. The new budget gave them several bits of good news. Firstly annual CGT alloawances remain. The lack of taper relief or indeaxation doesn't bother them becasue they buy and sell properties quickly. They also have an extra £1000 of income tax allowance each. So for them they now have as a couple after they have deducted property development costs joint income tax allowances of £6750 +£1000 x 2 per year. Added to this is their annual cgt allowance. £10,100 x 2. So before they pay any tax at all on their "business" they can make approximately £35000 tax free profit. Then if they split the profits the next £37500 x 2 (ie £75000) will give them tax at only 18%. So on the first £110,000 profit ("income") they will pay roughly £14k tax per year.

This is incorrect because this would be trading income and subject to tax at 20/40/50% through the income tax regime.

uk1

TM1976 wrote: »

This is incorrect because this would be trading income and subject to tax at 20/40/50% through the income tax regime.

Thanks for your comment. The point was in fact made earlier in the thread. I frankly didn't reply because answering one generalisation (which I'd made) about the tax in this situation (with another generalisation in reply) about how the guidelines are applied inconsistantly depending on many judgemental factors all of which are imho irelevant to the core of this particular debate - and so I therefore wasn't bothered to start a seperate and irrelevant sidetrack.

Others do know much more about this than me and that is always the way of life.:D

TM1976

I'm not really sure why CGT has created such a lot of dispute because even the current rates of 18% and 28% are a lot softer than the regime that was in place only a few years ago when income tax rates were used. You only get taxed on the gain not the selling price and there is a £10,000 annual exemption every year.

It's true that without indexation and tapering people who have held the asset for a long time can get caught out, but that's not a lot different from those who have savings who also lose out due to inflation. At least with property you are protected against inflation for the original asset even if you have to pay tax on the eventual gain.

uk1

TM1976 wrote: »

I'm not really sure why CGT has created such a lot of dispute because even the current rates of 18% and 28% are a lot softer than the regime that was in place only a few years ago when income tax rates were used. You only get taxed on the gain not the selling price and there is a £10,000 annual exemption every year.

It's true that without indexation and tapering people who have held the asset for a long time can get caught out, but that's not a lot different from those who have savings who also lose out due to inflation. At least with property you are protected against inflation for the original asset even if you have to pay tax on the eventual gain.

Let's see if I can help. How much of an issue is this for you personally - or are you just commenting unsympathetically on other peoples justifiable concerns?

Would I be correct in saying that you are not within spitting distance of retiring having held a second home for a long period of time in preperation for your reitrement having been shafted by Brown, Equitable Life and your employers pension scheme going South? People are upset because they had heard in the budget that they would continue to pay cgt at 18% only to discover they had been deceived and would pay all or some at 28%. Can you not understand why they might be a bit huffy at being cheated yet again? Most of this group have had limited or no gains on the capital value of their second property for several years and they've now seen that situation worsened by yet another deceitful plunder.

With respect it is very easy to be patronising about other peoples' concerns when your own cash life plans aren't involved.

TM1976

uk1 wrote: »

With respect it is very easy to be patronising

I can see you know this.

I'm making a general point about whether the CGT rates not about how they effect you - which is what this thread is for.

You appear to have 2 properties, fully paid for? Both held for a long time, so you'll get a substantial gain. One you can sell tax free using your PPR, another you have to pay 28% tax on some of the gain.

I know you are getting less than you originally intended but you've made a substantial gain through the property boom so you must have made a good investment decision. Plenty are worse off - cup half empty/half full?

uk1

TM1976 wrote: »

I can see you know this.

I'm making a general point about whether the CGT rates not about how they effect you - which is what this thread is for.

You appear to have 2 properties, fully paid for? Both held for a long time, so you'll get a substantial gain. One you can sell tax free using your PPR, another you have to pay 28% tax on some of the gain.

I know you are getting less than you originally intended but you've made a substantial gain through the property boom so you must have made a good investment decision. Plenty are worse off - cup half empty/half full?

So you have visited this forum about the impact of the latest cgt rates to tell us that we're better of than other people who have less.

Thanks. Very incisive.