Budget: Capital gains tax rise lets buy-to-let landlords off hook

Blacklight

You still get £80k tax free allowance (for a couple) plus the final three years gain tax free if it's a second home you've lived in rather than a BTL.

silvercar

Blacklight wrote: »

You still get £80k tax free allowance (for a couple) plus the final three years gain tax free if it's a second home you've lived in rather than a BTL.

If your talking about letting relief, you have to have let the property as well as lived in it to access that.

dealsearcher

IveSeenTheLight wrote: »

Are you sure on that?

Check this out:

http://www.ifaonline.co.uk/ifaonline/news/1687086/budget-2010-key-cgt-changes

(I had already posted it).

IveSeenTheLight

dealsearcher wrote: »

Check this out:

http://www.ifaonline.co.uk/ifaonline/news/1687086/budget-2010-key-cgt-changes

(I had already posted it).

I saw your post but did not believe it was income exempt

Originally Posted by dealsearcher
If their profit on sale of a property after deduction of allowances and losses exceeded £37,400 they would pay 28% on the excess.

Maybe you missunderstood the part about total taxable gains AND INCOME.
This means that it's not solely about the property and it's profits but also includes all income earned

1. For individuals.
The rate of CGT remains 18% where total taxable gains and income are less than the upper limit of the income tax basic rate band.
The 28% rate applies to gains (or any parts of gains) above that limit

dealsearcher

Thrugelmir wrote: »

I wouldn't be surprised to see a 40% band next tax year, along with a 20% lower rate. The change today was to appease the critics.

The Chancellor has already stated 28% is the highest figure they could go for. A higher figure would only result in a lower tax take as transactions would dry up. A higher figure is therefore unlikely in the future.

dealsearcher

IveSeenTheLight wrote: »

I saw your post but did not believe it was income exempt


Maybe you missunderstood the part about total taxable gains AND INCOME.
This means that it's not solely about the property and it's profits but also includes all income earned

I did not say it was income exempt and the item from ifaonline specifically states that the income tax allowance is included in the calculation. In Euphoria's example his 25K income would have already soaked up his income tax allowance.

IveSeenTheLight

dealsearcher wrote: »

I did not say it was income exempt and the item from ifaonline specifically states that the income tax allowance is included in the calculation. In Euphoria's example his 25K income would have already soaked up his income tax allowance.

sorry, your statement seemed to suggest that it was purely on the propfit on the sale of the property after deduction of alloawance and losses.

Maybe it should have said

Originally Posted by dealsearcher
If their profit on sale of a property and income after deduction of allowances and losses exceeded £37,400 they would pay 28% on the excess.

I guess more specific detail needs to come in as it could be read two ways.
Initially I had read it if you were a basic rate taxpayer or below you only pay 18% regardless of the CGT profit.

I know someone retiring who was planning on selling.
Depending on the detail, they may be better off waiting until the next tax year when they will be a pensioner

Thrugelmir

dealsearcher wrote: »

The Chancellor has already stated 28% is the highest figure they could go for. A higher figure would only result in a lower tax take as transactions would dry up. A higher figure is therefore unlikely in the future.

More a question of shaking the tree to make some apples drop. People with sizable gains may decide that now is still an opportune time to pocket gains, and reinvest the proceeds elsewhere. Married couples can transfer assets to minimise taxable gains in any event.

What the Chancellor said today, is yesterdays news. There is still some radical reform in the years ahead. To fund the increase in personal allowances to £10k there will be further tweaking of the tax system. One option is to reduce the tax free element of CGT thereby increasing the tax take without changing the rate.

dealsearcher

Thrugelmir wrote: »

One option is to reduce the tax free element of CGT thereby increasing the tax take without changing the rate.

Not sure how many times this has to be said: an increase to a higher rate or a reduction of the allowance will not increase the tax take, it would reduce it. Whether someone sells their property or shares is discretionary, a matter of choice. The only people who would be effected would be those who had to sell. Others would just hold onto their investment, take the rental income or the share dividend, and wait for a more favourable CGT tax regime. The Capital Gains tax take would fall.