Capital gains changes?

stephenadarglas

https://www.bbc.co.uk/news/business-54908037
Food for thought - perhaps

TBC15

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/934010/Capital_Gains_Tax_stage_1_report_-_Nov_2020_-_web_copy.pdf
It's put me off my dinner

Black_Cat2

I'm hoping there is no mention of scrapping or changing the relief you get when selling a second home you've previously been living in *crosses fingers*

verybigchris

I wonder if they are publishing a report showing CGT rates could double, so when it only increases by a smaller amount it can be spun as an act of generosity?
Personally, I think if they are willing to have a fight over controversial reforms to personal tax, then they should do the job properly and scrap NI.

Thrugelmir

verybigchris said:

I wonder if they are publishing a report showing CGT rates could double, so when it only increases by a smaller amount it can be spun as an act of generosity?
Personally, I think if they are willing to have a fight over controversial reforms to personal tax, then they should do the job properly and scrap NI.

There's a sizable bill that needs to be settled. 

Uxb1

It will end up the same as when idiot Osborne increased stamp duty: Result - overall stamp duty receipts reduced.

ColdIron

This is one of those subjects that comes up annually like pension contributions relief etc before the budget. I think they could make a strong argument to equalise rates to match income tax but not to scrap the exemption. What would be 'fair' would be to increase it slightly to equalise it with the Personal Allowance

TBC15

For me the proposed reduction in CGT allowance would be most inconvenient,

stephenadarglas

Like a lot of things in politics they are feeling the water before they dip in.

DireEmblem

I think a few things make sense - have one band of tax, regardless if your income is generated through salary, interest or capital gains.

We already have a tax free wrapper for investing - the ISA.  Most people probably cant save more than that amount in a year anyway.  The only thing I wish they changed with that, was the competition limitation, that you can only invest into one of each type of isa each year.

The solution would be a central government server.  Every time a user wants to top up an ISA, a query is sent to the server to check and request authorisation to accept the deposit.  Once you have this, then you can potentially connect in other investment accounts as well, and properly calculate the appropriate tax for each person.

They also need to stop considering student accommodation as 'affordable housing'.  Maybe it is, but student accommodation is 'short term'.  They should be supporting workers in the economy, to get on the housing ladder to better themselves in the long run by owning a home rather than paying rent.  By the time the mortgage is paid off, they could work less, leaving more jobs for others, or have more spending money to enjoy life, and again help fund more jobs.

Tax on second homes, buy to lets, etc would only serve to discourage buy to let investors buying up property to let out at inflated rents, and help stabilise and slow the increase in property prices I think.

We need to close the budget deficit, and I actually think these are sensible.  They even the paying field, and are taxes on the higher earners who can afford to contribute more to society.

chucknorris

Well thank god (and myself) that I have now sold most of my property, so I have no 'personal' axe to grind over the possibility of this. But I will continue to say what I have always said, and that is that just because there is a chargeable CGT gain, it doesn't necessarily mean that there has been a real term profit, because inflation is ignored (ever since indexation was scrapped, which was the fair way that CGT used to be dealt with). Imagine this, someone holds an asset for many years, but their notional capital gains profit, is only equal to inflation (or even worse less than inflation), then they have to pay 40% tax upon disposal of that asset despite having made no profit (or even worse a loss). I can see why they might do it though, there isn't going to be a lot of sympathy for those in that position, and tax will have to be raised from somewhere, and they are an easy target.

Although the report from the link above does say this:
If the government considers more closely aligning Capital Gains Tax and Income Tax rates it should also: • consider reintroducing a form of relief for inflationary gains,