Wednesday, May 19, 2010
CGT in BTL
BBC: What's the impact of changes to Capital Gains Tax on buy-to-let investors?
6 mins in.
The problem is, it's not just inviduals with BTL that wil be scr3wed by this.
What about people that only own 1 property, but have to live/rent ("residence") somewhere else to work, caught
by the "residence" bull sh1t rule from HMRC. DOULBE TAXATION !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
IMHO, CGT should only apply if on individuals who OWN more than 1 property.
Posted by doomwatch @ 01:47 PM (1248 views) Add Comment
11 Comments
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1. Master555 said...
You should look into Pricipal Private Residence Relief - you wont get CGT on teh property you own.
2. This comment has been removed as it was found to be in breach of our Blog Policies.
3. Wageslavex14 said...
There's loads of double taxation. VAT is the least fair of the double taxes, as it hits the poorest hardest.
CGT is probably one of the fairest, as it hits richer people.
I really don't understand what is so controversial about re-instating CGT to where it was three years ago.
4. righttoleech said...
BTLers squealing..........magic
5. growler said...
VAT .<>.. CGT
One if a tax on consumption, the other a tax on income.
Both are valid
The point is why is some income taxed at a different rate?
6. Daniel said...
According to a broker/tax specialist, I was talking to recently, this is easily avoidable for BTL brigade, with just two houses, as all they will have to do is declare their second homes as their main living residence....
7. nomad said...
Must be time for another article on the Wilsons.
8. mdmick said...
So the title is: BBC: What's the impact of changes to Capital Gains Tax on buy-to-let investors?
When this policy surfaced some days ago, the first thoughts were "only 50 days to sell a property and avoid higher CGT"
but immediately people were suggesting the reverse: rather than encouraging rapid sales (likely at a discount),
what might happen is that people just never sell their investment.
Then others talked about bypassing the tax by having occupied the rented property for the qualifying period (and maybe other ideas too ... )
In short, there is no clear mechanism by which the IR is going to either be quids in or quids out at least in the short term, no?
...unless a huge sale is triggered by a stampeding herd effect - as yet unknown. Then there would be CGT aplenty.
Hmm, what could trigger en masse propert sales? High Interest rates? , no-brainer investment sector which is not stagnating like property seems to be..., to name but two .
Captcha: Mr naiver [touche !!]
9. tenant super said...
I know someone who has been flipping and BTLing for the last 8 years (over 5 properties which were not their main home) and has never paid any income tax on rental income or any CGT on the £450K+ profit from sales. Their feeling is if they (the state) want it, they'll have to ask for it (and fines are usually so small it is worth the risk).
I ask myself what's the point of twiddling with the rules when despite all the tough talking (designed to frighten people into compliance) so many amateurs are evading tax even though the information to catch them all is readily available if you put some semi competent staff into the HMRC.
You can tell me to report them, but the evasion hotline has a backlog of hundreds of uninvestigated cases apart from which, I am a critic of the legitimacy of the State so I'd be a hypocrite to do this. And thirdly this person is a single parent and I am not sure I can be that vindictive or bask in the shadenfreude as they would certainly go bankrupt and lose their own home.
I would be happy for the to actually enforce the existing rules for a start!
10. Johnny5thumbs said...
The whole premise of this post is built on an incorrect understanding of CGT - with CGT, you nominate your principal private residence, regardless of which one you spend most time in, so obviously you nominate your owned property - not the one you're renting.
If only some HPC'ers would do a bit of reading up first before posting alarmist 'end-of-the-world' posits.
11. doomwatch said...
t super @8. I too know of a number of amateur property "developers" who don't declare CG on their self assessment, and quite
a few over 50 that don't even fill out a self assessment. The HMRC totally relies on fright/honesty to get it's
grubbly little double taxation trotters on the loot for their squires and HRH, and these guys aren't bothered, as they'd
rather do 6 months in "prison" playing on PS3s and getting 4* nosh.