It looks like...

jacko74

... our BTL heroes have moved on from Denial and Anger and are now at the Bargaining stage of the cycle (at least those that understand the CGT implications are anyway)

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11916423/Buy-to-let-investors-Let-us-off-capital-gains-tax-and-well-sell-to-first-time-buyers.html#disqus_thread

Graham_Devon

It's all rather perverse and makes these 40,000 landlords the body represents sound pretty fearful.

But I don't understand why they believe they should be treated different to any other business. They will only pay CGT on any profit they have made, so I'm not really sure what the bleating is all about that it will ruin them. Profit is profit.

What happened to investor risk? I know bricks and mortar was supposed to be a dead cert, but these investors should also know that anything that is described as a dead cert invariably isn't.

chucknorris

Graham_Devon wrote: »

It's all rather perverse and makes these 40,000 landlords the body represents sound pretty fearful.

But I don't understand why they believe they should be treated different to any other business. They will only pay CGT on any profit they have made, so I'm not really sure what the bleating is all about that it will ruin them. Profit is profit.

What happened to investor risk? I know bricks and mortar was supposed to be a dead cert, but these investors should also know that anything that is described as a dead cert invariably isn't.

I've no problem paying tax on real profit, and I've said this before and it applies to ALL assets that attract CGT, not just property. CGT isn't fair in its current format, because it taxes inflation, the old indexation system was fair (it was replaced with the taper relief system, which was not ideal, but better than the current system), in that system indices were used to adjust the asset value for inflation, and then 40% (or whatever your marginal tax band was) tax was paid on the post inflation gain. Under the current system someone could sell an asset that has gained value at less than the rate of inflation, so in real terms it has shown a loss, yet CGT would still be payable.

Going back on subject, this does seem like a daft idea to me, I don't think landlords should be treated any differently with CGT to any other asset holders (although I do think that there is an argument for allowing roll over relief, which is allowed on commercial property). As Graham implied they took on the risk when they invested, furthermore if they had made an extra high gain, would they be volunteering to pay more tax? No, obviously not.

kinger101

chucknorris wrote: »

I've no problem paying tax on real profit, and I've said this before and it applies to ALL assets that attract CGT, not just property. CGT isn't fair in its current format, because it taxes inflation, the old indexation system was fair (it was replaced with the taper relief system, which was not ideal, but better than the current system), in that system indices were used to adjust the asset value for inflation, and then 40% (or whatever your marginal tax band was) tax was paid on the post inflation gain. Under the current system someone could sell an asset that has gained value at less than the rate of inflation, so in real terms it has shown a loss, yet CGT would still be payable.

Going back on subject, this does seem like a daft idea to me, I don't think landlords should be treated any differently with CGT to any other asset holders (although I do think that there is an argument for allowing roll over relief, which is allowed on commercial property). As Graham implied they took on the risk when they invested, furthermore if they had made an extra high gain, would they be volunteering to pay more tax? No, obviously not.

Have to agree with both these points.

(a) restore indexation allowance for CGT
(b) allow rollover relief for BTL

At the same time though, I'd remove the personal CGT allowance with respect to BTL property.

mystic_trev

It would be great for me as mine are all two bed properties.

chucknorris wrote: »

Going back on subject, this does seem like a daft idea to me, I don't think landlords should be treated any differently with CGT to any other asset holders

Agreed

chucknorris

kinger101 wrote: »

Have to agree with both these points.

(a) restore indexation allowance for CGT
(b) allow rollover relief for BTL

At the same time though, I'd remove the personal CGT allowance with respect to BTL property.

I could go along with that, although I have to declare it wouldn't actually affect me, due to share dealings. But of course affecting any particular individual isn't the point, and TBH I can't see why landlords should be excluded from the personal allowance, but I don't particularly care anyway.

Carl31

I thought landlords were just going to jack up rent and make tenants pay?

Anyway, this whole situation is a win win for the governemnt, if the landlord keeps their property, assuming HR tax payer, more income each year, if they sell, GGT

Theyre not going to let anyone off

Fella

Residential Landlords Association, which represents around 40,000 private landlords

A fraction of the amount of voters that live in rented properties.

BTL is firmly in the sights of all parties now & going to remain so for the foreseeable future IMO. Bashing landlords could take over from bashing banks (especially since bashing landlords generally means beating up on a group of quite small individuals, not huge corps.)

The smart landlords will adapt or move on pretty much unruffled. The dumb ones & the genuine-but-small/part-time ones might get trampled though. Bound to be unedifying but that's true of every aspect of the UK housing market. Whether it goes up or down or stays the same it brings out the most revolting qualities in the people who comment on it. A bit like football.

kinger101

chucknorris wrote: »

I could go along with that, although I have to declare it wouldn't actually affect me, due to share dealings. But of course affecting any particular individual isn't the point, and TBH I can't see why landlords should be excluded from the personal allowance, but I don't particularly care anyway.

FWIW, along with the restoration of indexation allowance, I think the CGT rates should revert to 20%/40%. I'm not comfortable with earned income being taxed at a higher rate than unearned income.

So in effect, it gets us back to where we were before the rules changed;

(a) the taxation is based on actual profit, and not inflation;
(b) there is no difference in the rates in CGT/IT

I can't think why Brown changed this TBH.

The rollover relief might actually generate more SDLT, as I think the current CGT system becomes a barrier to people selling their properties until they absolutely need to.