The economy and the autumn statement

padington

This was quite a cunning move, it will appear redistributive but actually will keep the fire under the property market by not removing tax credit cuts, doctor cuts, police cuts and introducing interest free Loans and making a five month bun fight to get a second home quick.

No doubt the fire will be more steady after five months of more boom but non the less property owners will do well out of all this. Whilst everyone will still be franchised to crowd fund UK property using companies with 15 properties or more.

One thing it might do though is heavily dampen the price on properties that no one wants to buy to live in themselves. Again this will benefit places like London.

If I had a portfolio of crap flats in crap towns, I might consider getting out before April, that's for sure.

antrobus

lisyloo wrote: »

...
Isn't it the one you haven't designated as your PPR?

I wouldn't have thought so. I'd bet that you will be charged the extra SDLT on buying an 'additional property' irrespective of what you intend doing with it.

wymondham

Thrugelmir wrote: »

Why should people expect any help?

I know of several 'elderly' people living in homes too big for them. If they didn't have to pay stamp duty for instance that may encourage them to move to flat/sheltered accommodation so a family can buy their home?

This seems much more sensible than giving first timers help in buying their overpriced house?

cells

CLAPTON wrote: »

in this example

cgt = 0 for any gain or any size estate as there is no cgt on death

wow that is quite significant i did not know that.

So in a way inheritance tax is not as bad/large as it seems.
If you have a £100k gain you can sell now and pay £28k in CGT and pay no inheritance tax (if you survive 7 years). Or you can hold on and on death pay 40% of the £100k gain or £40k in inheritence tax. So its £40k vs £28k which is much better than the £56.8k vs £28k I thought it was.

However this must create some silly situations whereby if you sell a property and die soon after you pay both CGT and then inheritance tax on that. So if you think you might die within the next 5 years it would be best not to sell to avoid the CGT. Of course best to get your affairs in order well before you think you might die in the next 10 years

michaels

Stuff for us to talk about in future?

Salary sacrifice

If you swap your salary for something else, such as childcare or a higher pension, this is called salary sacrifice. Usually the swap means that tax and/or National Insurance contributions are reduced or removed altogether.
In the Autumn Statement, the government warned that it "remains concerned" about salary sacrifice and "is considering what action, if any, is necessary" - in effect, a warning that things might change.

A new pensions tax system

The current pensions tax regime works like this: you get tax relief when you pay into a pension, but pay tax on most of the pension when you receive it.
The government is considering scrapping this system entirely, replacing it with a system similar to an Individual Savings Account (Isa).
The money you pay into your Pension-Isa will come out of your taxed income. The government may then add a bonus to your savings, and when you take your pension it will be tax free.
The government will announce its decision in next year's Budget. If the change goes ahead it will be the biggest shake-up of pensions in our lifetimes.

http://www.bbc.co.uk/news/business-34927158

cells

wymondham wrote: »

I know of several 'elderly' people living in homes too big for them. If they didn't have to pay stamp duty for instance that may encourage them to move to flat/sheltered accommodation so a family can buy their home?

This seems much more sensible than giving first timers help in buying their overpriced house?

surely that will just result in FTBs being displaced by grandmas with 40 years of equity outbidding them for the 1-2 bed flats/homes?

CLAPTON

cells wrote: »

wow that is quite significant i did not know that.

So in a way inheritance tax is not as bad/large as it seems.
If you have a £100k gain you can sell now and pay £28k in CGT and pay no inheritance tax (if you survive 7 years). Or you can hold on and on death pay 40% of the £100k gain or £40k in inheritence tax. So its £40k vs £28k which is much better than the £56.8k vs £28k I thought it was.

However this must create some silly situations whereby if you sell a property and die soon after you pay both CGT and then inheritance tax on that. So if you think you might die within the next 5 years it would be best not to sell to avoid the CGT. Of course best to get your affairs in order well before you think you might die in the next 10 years

No, there is no 7 year rule that means the cash raised from the sale of an assett is exempt from IHT .

The 7 year rule apples to GIFTS that you make : if you die within 7 years of making a gift to some-else then they are added backed to the value of your estate (so potentially taxed twice).

cells

michaels wrote: »

Stuff for us to talk about in future?

http://www.bbc.co.uk/news/business-34927158

what would happen to existing pensions

can you imagine the existing pensions converted to a pension-isa. all that tax relief returned to the state in one big go. maybe over a couple of hundred billion!

So for instance if person contributed £0.6m and got £400k relief for it to make a total of £1m pot to date. If that system is converted to a £0.6m isa and not taxed when retired then the gov takes £400k of that for itself today.

I reckon its long overdue. the problem with pensions is that you can earn money here the gov top it up and then you could go live in some other country and pay no tax. I suppose you could effectively earn tax free here in the uk by putting nearly all your earnings into a pension and then go retire in cyprus or wherever and pay nothing to the uk

cells

CLAPTON wrote: »

No, there is no 7 year rule that means the cash raised from the sale of an assett is exempt from IHT .

The 7 year rule apples to GIFTS that you make : if you die within 7 years of making a gift to some-else then they are added backed to the value of your estate (so potentially taxed twice).

if you have a £100k gain from the sale of a property you pay £28k CGT which leaves you with £72k. You can gift that £72k to say your kids and if you die in ten years time that £72k is there not yours for IHT

Or if you keep the property you can pay 40% on death for the £100k equity of the house and the kids get £60k from the estate.

if you sell the BTL and pay the £28k CGT and have £72k in cash in a savings account and then die you pay 40% on the £72k the kids get £43.2k


So a £100k gain could be passed on as £72k or £60k or £43.2k going to the kids (or whoever) depending on how/when the sale/disposal takes place. the interplay between CGT/IHT/Both

that is my understanding is that right?

missyrichards

michaels wrote: »

Stuff for us to talk about in future?



http://www.bbc.co.uk/news/business-34927158

Hmm, I didn't hear that yesterday.