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Mr. Miyagi

Captial Gains Tax To Raise 10%

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CAPITAL Gains Tax will be hiked by only ten per cent — in a massive Tory climb down, The Sun can reveal.

The top rate of CGT — the tax charged on the profit made on a property and assets — will be set at 28 per cent, George Osborne will reveal today

The lower rate will be kept at 18 per cent.

This will be seen as a retreat by the Chancellor in his emergency budget.

It had been widely expected that he would hike CGT to align with income tax levels and could have meant a rate of 40 or even 50 per cent being charged.

The bulk of CGT revenues, 55 per cent, comes from assets that people have held for more than eight years, the sort used by middle-income families to save for their retirement.

It is their careful saving that a CGT rise will hit.

The news will be welcomed by families who had feared their savings could be wiped out.

The Sun can also reveal that child benefit will be frozen for THREE YEARS.

Child benefit is currently £20.30 a week for the first child and £13.40 for other children.

It is an effective cut to child benefit in real terms as inflation continues to rise.

Chancellor George Osborne this morning briefed the Cabinet on what he said would be a "tough but fair" emergency Budget, Downing Street said.

He said: "My budget is tough but it will be fair. This is an unavoidable Budget because of the mess we have to clear up.

"So the Coalition Government will take responsibility for balancing Britain's books within five years.

"We're going to do it fairly, protecting children and pensioners, and ensuring the richest contribute the most.

"And it means getting enterprise going, because it's businesses, not government, that will create the jobs of the future."

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Story here

CAPITAL Gains Tax will be hiked by only ten per cent — in a massive Tory climb down, The Sun can reveal.

The top rate of CGT — the tax charged on the profit made on a property and assets — will be set at 28 per cent, George Osborne will reveal today

The lower rate will be kept at 18 per cent.

This will be seen as a retreat by the Chancellor in his emergency budget.

It had been widely expected that he would hike CGT to align with income tax levels and could have meant a rate of 40 or even 50 per cent being charged.

The bulk of CGT revenues, 55 per cent, comes from assets that people have held for more than eight years, the sort used by middle-income families to save for their retirement.

It is their careful saving that a CGT rise will hit.

The news will be welcomed by families who had feared their savings could be wiped out.

The Sun can also reveal that child benefit will be frozen for THREE YEARS.

Child benefit is currently £20.30 a week for the first child and £13.40 for other children.

It is an effective cut to child benefit in real terms as inflation continues to rise.

Chancellor George Osborne this morning briefed the Cabinet on what he said would be a "tough but fair" emergency Budget, Downing Street said.

He said: "My budget is tough but it will be fair. This is an unavoidable Budget because of the mess we have to clear up.

"So the Coalition Government will take responsibility for balancing Britain's books within five years.

"We're going to do it fairly, protecting children and pensioners, and ensuring the richest contribute the most.

"And it means getting enterprise going, because it's businesses, not government, that will create the jobs of the future."

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What will bring HPC & KILL DEAD BTL-ers is rates & reduction of loans from banks.........................both are baked in.

Mike

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So, how does a flat rate 28% CGT with no indexation or taper relief compare top the previous 40% CGT with taper relief? Also need to factor in the housing benefit cuts to try and assess the impact for BTL'ers.

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The Sun was right... Cable and Clegg obviously lost the battle...

What's the point of winning the battle if you lose the war?

Do you really think that a flat rate 40% would have got through parliment (I don't).

ISTM that a flat rate 28% is better than 40% and tapering.

tim

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boo.

still, 28% with no indexation or owt is a fair whack.

this feels like, what's the word, compromise.

I'd agree it's a compromise but not what those crying for an HPC wanted.... it stays at 18% for lower rate tax payers and rises to 28% beyond that.... I wonder where you'd be if you only had earnings of say £20,000 in a tax year and then declared capital gains of £50,000.... £10,000 would be tax free, and the other £40,000 I suspect as you were effectively a lower rate taxpayer would be taxed at 18%.

This is relevant as many of the BTL brigade are / or can make themselves lower rate taxpayers and in any even the announcement that the allowance will remain for years ahead means that a couple would have £20,000 of gain before the tax even starts.

I don't think this will have any real effect on housing.

Equally those hoping for changes to the holiday rental arena I think were doubly dissapointed as I thought they were efectively freed from a tax coming their way ( I didn't quite catch all the details).

The big big change however that may well have HPC'ers jumping about for joy was the announcement in changes to housing allowance... I haven't crunched the figures but if they are planning to save money here then it can't be good for landlords and neither can the announcement that they are looking again at reducing mortgage support...

So I think broadly HPC'ers will be disappointed big time by the CGT announcements but might feel they clawed back more via the housing benefit announcements.

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So, how does a flat rate 28% CGT with no indexation or taper relief compare top the previous 40% CGT with taper relief? Also need to factor in the housing benefit cuts to try and assess the impact for BTL'ers.

Exactly - lets face it - its not good news for BTL is it? It can only make things worse for them.

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So, how does a flat rate 28% CGT with no indexation or taper relief compare top the previous 40% CGT with taper relief? Also need to factor in the housing benefit cuts to try and assess the impact for BTL'ers.

I would say that is fair.....what we don't want is to encourage is future investment into property, what we need is moneyed people to look to investing into business that will create new private sector jobs... ;)

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Exactly - lets face it - its not good news for BTL is it? It can only make things worse for them.

Indeed, I agree - it would be good to see some worked examples of the maths comparing the 2 scenarios (28% with no taper relief Vs 40% with taper relief) for BTL'ers who sell after 5, 10, 15 years.

Also, it must now be a worry for BTL'ers that CGT is going to be raised in increments - perhaps to 35% next budget and then 40% the Budget after that (and raising CGT with no taper relief or indexation now has a precedent).

I don't think this Budget is as much 'good' news for BTL'ers as our first responses seem to indicate, nor as much 'bad' news for HPC'ers that were hoping CGT would be raised to 40% as first seems. I suspect that if George had gone for the full rise to 40%/50% then it would almost certainly have been with taper relief. Is the 28% as much of a compromise as it first appears?

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Sounds like they have housing benefits in their sights though - that is where a lot of the BTL income comes from (excluding students - who are going to be proper ******ed when they have tuition fees of £5K - £7K a year).

Edited by OnlyMe

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so all this will effectively do is potentially deter future BTL purchases, but no firesale.

Very dissapointing from georgie boy. I always knew he was a poof.

Although I've always said te crash is happening without it. It just won't be quite as fast.

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The Sun was right... Cable and Clegg obviously lost the battle...

From midnight tonight will not cause any flood to the market either.

Even if there was a flood to the market, so what? average sheeple don`t have the credit any more to buy houses, and if it had been higher many idiots would knock 2k off 2007 prices thinking that was a firesale laugh.gif the choice facing sellers now is either keep the house and pay your debt, or get the price right down, right down low. The Tories know the property market is crumbling, they just want controlled demolition rather than all out collapse IMO, that way the banks can try to trade through?

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I'd agree it's a compromise but not what those crying for an HPC wanted.... it stays at 18% for lower rate tax payers and rises to 28% beyond that.... I wonder where you'd be if you only had earnings of say £20,000 in a tax year and then declared capital gains of £50,000.... £10,000 would be tax free, and the other £40,000 I suspect as you were effectively a lower rate taxpayer would be taxed at 18%.

This is relevant as many of the BTL brigade are / or can make themselves lower rate taxpayers and in any even the announcement that the allowance will remain for years ahead means that a couple would have £20,000 of gain before the tax even starts.

I don't think this will have any real effect on housing.

Equally those hoping for changes to the holiday rental arena I think were doubly dissapointed as I thought they were efectively freed from a tax coming their way ( I didn't quite catch all the details).

The big big change however that may well have HPC'ers jumping about for joy was the announcement in changes to housing allowance... I haven't crunched the figures but if they are planning to save money here then it can't be good for landlords and neither can the announcement that they are looking again at reducing mortgage support...

So I think broadly HPC'ers will be disappointed big time by the CGT announcements but might feel they clawed back more via the housing benefit announcements.

Good post, but as a HPCer three letters can sum this up ...

FFS :angry:

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On another thread someone has suggested that under the old CGT regime (ie the 40% CGT with taper relief) that people could, with the taper relief, reduce the CGT bill to 24% - so this flat rate 28% (not for lower income tax payers I know) with no taper relief is higher than that. I have also read elsewhere that under the 40% CGT with taper relief regime that the average CGT bill paid was 18% CGT - again the new 28% with no taper relief is significantly higher than this. I suspect that this 'compromise' 28% CGT (with no taper relief) is not as much good news for BTL'ers & 2nd home owners as first appears.

Then add in the changes in housing benefits ....... and then what if this is just the start of rises for CGT (with no taper relief) and cuts in housing benefit - what will happen in the next Budget. These are thoughts that BTL'ers will be playing around with and will have to make judgement calls abouit getting out of BTL now before further CGT rises and housing benefit cuts take place ..... as well as the knowledge that house prices are starting to turn downwards and there are no hints of the Government stepping in with props to keep house prices from falling as provided by Gordon Brown et al.

Perhaps we should keep up the Newspaper Readers Comments campaign going in order to point some of this out for the slower thinking BTL'ers and 2nd home owners.

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So, how does a flat rate 28% CGT with no indexation or taper relief compare top the previous 40% CGT with taper relief? Also need to factor in the housing benefit cuts to try and assess the impact for BTL'ers.

I think these were the previous tapers up until 2008, so it looks as if someone owned the property less than 8 years the new scheme is better for them than the pre 2008 scheme

e.g after 5 years the effective rate was 34%, 8 years 28%, 10 years 24%

* 0 Years owned and then disposed of. Percentage of gain taxable is 100%

* 1 Year owned and then disposed of. Percentage of gain taxable is 100%

* 2 Years owned and then disposed of. Percentage of gain taxable is 100%

* 3 Years owned and then disposed of. Percentage of gain taxable is 95%

* 4 Years owned and then disposed of. Percentage of gain taxable is 90%

* 5 Years owned and then disposed of. Percentage of gain taxable is 85%

* 6 Years owned and then disposed of. Percentage of gain taxable is 80%

* 7 Years owned and then disposed of. Percentage of gain taxable is 75%

* 8 Years owned and then disposed of. Percentage of gain taxable is 70%

* 9 Years owned and then disposed of. Percentage of gain taxable is 65%

* 10 Years owned and then disposed of. Percentage of gain taxable is 60%

Edited by oldsport

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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