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Tax Rises Could Prompt 'fire Sale' Of Second Homes

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http://uk.finance.yahoo.com/news/tax-rises-could-prompt-fire-sale-of-second-homes-and-shares-tele-ca593d472da8.html?x=0

Tax rises could prompt 'fire sale' of second homes and shares

Alastair " Ali" Jamieson, 12:42, Monday 17 May 2010
A 'fire sale' of second-homes, shares and fine art is expected as investors try to beat widely-expected leaps in capital gains tax (CGT) and VAT.
Property owners and shareholders are seeking to sell assets to beat the anticipated rises, which are likely to be announced in Chancellor George Osborne's emergency budget next month and could be implemented immediately.
Buy-to-let landlords would be among those hardest hit by the increases, which could lead to a flood of extra property on the market.
Many tax and investment experts are advising clients with shares to cash in any gains "sooner rather than later".

I am starting to REALLY like this new Coalition government.

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Meanwhile on location, location, location Philth is ramoing BTL like f**k.........of one 'slavebox' for sale.......'it clearly worked for this investor but now he wants to offload it' 'and of a vile run down soulless house 8 miles from Bristol centre 'the best financial opportunities are not always those you would want to live in'.......vile parasites.

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Meanwhile on location, location, location Philth is ramoing BTL like f**k.........of one 'slavebox' for sale.......'it clearly worked for this investor but now he wants to offload it' 'and of a vile run down soulless house 8 miles from Bristol centre 'the best financial opportunities are not always those you would want to live in'.......vile parasites.

They revisited this lot. The house in Devon went into neg eq, the bloke lost his job and the rent on the Bristol flat didn't cover the mortgage.

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There's scarely time to sell off the BTL empire. I'm guessing the "strike point" would be exchange of contracts.

Some really enterprising accountant could start a bed-and-breakfast scheme for houses, he'd make a killing in the next 30 days. (B&B is more commonly used for shares - you sell one day and buy back the next and thus crystalise the capital gain at the current rate. HMRC now have rules to stop that working on shares, but houses??!!)

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They revisited this lot. The house in Devon went into neg eq, the bloke lost his job and the rent on the Bristol flat didn't cover the mortgage.

......thanks for that info...I feel mean now.....but good to see BTL come uppance

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Jesus, I am SO happy! This new government really seem to be going in the right direction. I wonder if they see the rising cost of housing as a problem, or if this is indirect.

BTLs squealing, spongers about to get benefits cut - thank heavens we got rid of Labour! Housing may become affordable once again.

More than anything I take great delight in seeing BTLs squirm.

Where is Sibley now?

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......thanks for that info...I feel mean now.....but good to see BTL come uppance

They just brushed it under the carpet on the show, but it would have made a more useful programme, a warning that it is not all fairytale endings and how to cope if it happens...

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Not a problem if the price is right. Selling at a loss gets rid of the CGT difficulty altogether.

p-o-p

What's the tax position if you do sell at a loss ?

Tax relief at 40% as well?

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http://uk.finance.yahoo.com/news/tax-rises-could-prompt-fire-sale-of-second-homes-and-shares-tele-ca593d472da8.html?x=0

Tax rises could prompt 'fire sale' of second homes and shares

Alastair " Ali" Jamieson, 12:42, Monday 17 May 2010
A 'fire sale' of second-homes, shares and fine art is expected as investors try to beat widely-expected leaps in capital gains tax (CGT) and VAT.
Property owners and shareholders are seeking to sell assets to beat the anticipated rises, which are likely to be announced in Chancellor George Osborne's emergency budget next month and could be implemented immediately.
Buy-to-let landlords would be among those hardest hit by the increases, which could lead to a flood of extra property on the market.
Many tax and investment experts are advising clients with shares to cash in any gains "sooner rather than later".

I am starting to REALLY like this new Coalition government.

Honeymoon period.

Watch what they do, not what they say.

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I am starting to REALLY like this new Coalition government.

Ironically, the tax plans of the new ever-so-slightly right of centre Gov't are what we would normally expect under a Labour Govt of days gone by.

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What's the tax position if you do sell at a loss ?

Tax relief at 40% as well?

No, you get to take all the losses if you have no other gains to offset them against in the same tax year.

In AUS, housing losses such as mortgage > rent an be offset agains income tax.

VMR.

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One thing, the 40% is expected to apply to "non-business" assets. But BTL is a business. :huh:

How many run it as a business though?

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No, you get to take all the losses if you have no other gains to offset them against in the same tax year.

In AUS, housing losses such as mortgage > rent an be offset agains income tax.

VMR.

It can here too.

you cant pay income tax on no income....

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I meant that you can reduce your income tax bill (in AUS) by making a rental loss. In the UK, this doesnt work.

VMR.

ah yes...PAYE is such a pain... but they can offset losses from one year against profits in another.

course, CGT only occurs if there IS a capital gain.

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Depends on the timing. If the changes come in immediately then will not be time to sell, for most I think needs to be completion to crystalise capital gain.

Also a bit risky what if CG rise is back dated to start of fiscal year or to date of election?

If changes come in from 6 April then there is time to sell, and yes would predict lots of sales.

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Depends on the timing. If the changes come in immediately then will not be time to sell, for most I think needs to be completion to crystalise capital gain.

Also a bit risky what if CG rise is back dated to start of fiscal year or to date of election?

If changes come in from 6 April then there is time to sell, and yes would predict lots of sales.

I think back-dating the rise would be a non-starter. Whole housing chains would fall apart AFTER completion. :o

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BTL would only be seen as a Business where any earnings over and above expenses were declared as income.. How many do that?

Some undoubtedly will and probably turn a few quid year on year for doing it but then again they will have been at it the longest.

In one sense you could argue they have paid tax on the rental income so why should they be clobbered twice on the asset disposal?

Just playing devils advocate here.

That said a clearly defined business (with a property disposal) would be a freehold hotel or papershop for example where the goodwill transfers and forms part of the sale. The key here in tax purposes I think is that goodwill.

How could a BTL holding express goodwill except thru existing tenants? More importantly how could it be valued?

Then there is the planning permission aspect, a hotel or papershop could not be used as a private house could it?

HMRC are not twunts I would imagine they know all the loopholes and the best way to extract revenue from the sector.

Edit typo...

Edited by geezer466

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      • down 5% +
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      • up 5%



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