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bit of a disappointment about CGT rate rises BUT

Does anyone know answer to the following:-

If someone is a lower rate tax payer and the Capital Gain made during the year takes them over the tax threshold to 40% will that amount of Capital Gain above the threshold be taxed at 28% CGT. . or still taxed at 18%

If it is taxed at higher rate of 28% then most property sold will now be subject to 28% CGT. (Assuming the owner has any sort of job)

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bit of a disappointment about CGT rate rises BUT

Does anyone know answer to the following:-

If someone is a lower rate tax payer and the Capital Gain made during the year takes them over the tax threshold to 40% will that amount of Capital Gain above the threshold be taxed at 28% CGT. . or still taxed at 18%

If it is taxed at higher rate of 28% then most property sold will now be subject to 28% CGT. (Assuming the owner has any sort of job)

I think you will have to distinguish between income and capital gains. i.e. income includes BTL rent, share dividends and interest on savings, and of course, your salary. If that takes you to the 40% income tax level then you pay 28% on all your CGT above the threshold. If not, you pay 18% on all your CGT above the threshold.

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I think you will have to distinguish between income and capital gains. i.e. income includes BTL rent, share dividends and interest on savings, and of course, your salary. If that takes you to the 40% income tax level then you pay 28% on all your CGT above the threshold. If not, you pay 18% on all your CGT above the threshold.

It's terrific news for anyone who can vary their income tax to suit.. being self-employed for instance is a massive benefit in that kind of situation as you can if you want to effectively avoid a wholoe host of taxes which you'd pay if having the same earnings as an employed person.

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Given that the HPI industry is so huge in the country it may have been too dangerous to arrest it too quickly so 28% is a gentle nudge in the right direction. It will mean that flippers will have to see a huge gain to offset 28% tax and I don't see houses gaining that kind of money this side of 2020.

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Cash with nowhere to go

That is exactly the question. Whether your Capital Gain is counted towards your threshold limits. If not of course then anyone with a potential CGT liability has to wait till they have a year when income is below the threshold before selling.

Just wondering how the rules are interpreted by any accountants here...?? Perhapsa bit early to say before the rules come out?

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If you had spare cash around now - big sum, say 300K - would you put it into the FTSE and DOW or buy a second home, possibly to rent out?

If you are nearing retirement or retired then a house is a physical thing, it can bring in rent whereas you can buy stocks now and in an hour they could be worth 50 percent less.

If you are nearing retirement or retired then you also probably do not care about what happens to the house once you die in terms of tax.

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It was a good move implenting from midnight. Had it been the start of the tax year there would have been a lot of people selling up. As it's tonight what's the point in selling up. Gotta keep the house ponzi going.

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If you had spare cash around now - big sum, say 300K - would you put it into the FTSE and DOW or buy a second home, possibly to rent out?

If you are nearing retirement or retired then a house is a physical thing, it can bring in rent whereas you can buy stocks now and in an hour they could be worth 50 percent less.

If you are nearing retirement or retired then you also probably do not care about what happens to the house once you die in terms of tax.

My STR/STM fund in cash earning nothing interest wise but I am simply waiting to invest 2/3rds of it in a house and bank the rest in other than stocks.

Tax is rarely a mover in property in an event. Depressed salaries, higher IR are the two main factors that move houses. Right now they are unaffordable for the vast majority including crucial FTBs. The BTL/speculators will think twice with 28% tax on their flipping exercises which will slow down their empire building.

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It's not really good news for us HPC lot.

I think there are going to be a lot of people looking for loop holes (lying about there income) and it just means alot of older folk, who might not earn that much but have plenty of assests end up better placed than others.

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The rise wont be enough to deter many, I'd expect. Much lower than the higher rate of income tax.

Just last night a friend of mine who is graduated told me how his parents are telling him to get into property as soon as possible. They're giving him a deposit and he's going to get a lodger in to help pay the mortgage off (I think he has to declare that, though?). Anyway they all strongly believe in this as the best way to make money. I told him not to put all his eggs in one basket.

I said that if prices don't fall after the tough budget then they never will, and even I will consider emigrating or buying a place. Well, it was a flop, and I'm afraid I'm going to buy in a few years now (when I can pay a mortgage straight off) or just move away. He'll likely make a lot of money from getting into property.

Sorry - maybe this is all rubbish - but I feel so despondent now.

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It was a good move implenting from midnight. Had it been the start of the tax year there would have been a lot of people selling up. As it's tonight what's the point in selling up. Gotta keep the house ponzi going.

It`s not as if people can just make the decision to sell though? Surely you need a thing called a "buyer" to sell anything laugh.gif the only way to sell your house now is to really start cutting the price.

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It's not really good news for us HPC lot.

I think CGT increase without indexation/tapering is good news for HPC, it makes a house as a long term investment less attractive for the BTL'rs. With the 100K's of job losses to come, overall I think that's about as good as we could hope for.

VMR.

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If you had spare cash around now - big sum, say 300K - would you put it into the FTSE and DOW or buy a second home, possibly to rent out?

If you are nearing retirement or retired then a house is a physical thing, it can bring in rent whereas you can buy stocks now and in an hour they could be worth 50 percent less.

If you are nearing retirement or retired then you also probably do not care about what happens to the house once you die in terms of tax.

You missed out the option keep it in the bank

Over the next 3-5 years that would be my choice as it has the last 3 1/2 (just not in Sterling)

ive had a look at the budget and it looks pretty solid to me. A Pretty balanced affair and a good start, just a shame its over a decade to late to make a difference

Edited by Tamara De Lempicka

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Cash with nowhere to go

That is exactly the question. Whether your Capital Gain is counted towards your threshold limits. If not of course then anyone with a potential CGT liability has to wait till they have a year when income is below the threshold before selling.

Just wondering how the rules are interpreted by any accountants here...?? Perhapsa bit early to say before the rules come out?

I suppose it was a bit of a trade of against not bringing back any reliefs and tapers. He took the middle road. Obvious really.

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It`s not as if people can just make the decision to sell though? Surely you need a thing called a "buyer" to sell anything laugh.gif the only way to sell your house now is to really start cutting the price.

Agreed, but if people aren't distressed then they might not consider selling. Depends on how many private landlords rent to tennants in receipt of housing benefits. If their tennants areon benefits then they might reason to sell.

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My STR/STM fund in cash earning nothing interest wise but I am simply waiting to invest 2/3rds of it in a house and bank the rest in other than stocks.

Tax is rarely a mover in property in an event. Depressed salaries, higher IR are the two main factors that move houses. Right now they are unaffordable for the vast majority including crucial FTBs. The BTL/speculators will think twice with 28% tax on their flipping exercises which will slow down their empire building.

Remember when only a couple of years ago a btl had to consider the tax at 40%. This tax will make no difference. The fact is that property is unlikely EVER to make the gains it did. That alone will restrict BTL.

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and he's going to get a lodger in to help pay the mortgage off

And where, pray, is this magical lodger going to appear from? I love the way wannabe LLs assume reliable people can be magicked out of nowhere, stay as long as you want, disappear upon convenience when your life changes and never cause a problem.

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And where, pray, is this magical lodger going to appear from? I love the way wannabe LLs assume reliable people can be magicked out of nowhere, stay as long as you want, disappear upon convenience when your life changes and never cause a problem.

Indeed.

And with the restriction on HA, VAT up to 20%, public sector pay freeze, job losses abound, etc. these mythical lodgers are expected to pay "market rates" that magically cover the BTL mortgage........you couldn't make it up. B)

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bit of a disappointment about CGT rate rises BUT

Does anyone know answer to the following:-

If someone is a lower rate tax payer and the Capital Gain made during the year takes them over the tax threshold to 40% will that amount of Capital Gain above the threshold be taxed at 28% CGT. . or still taxed at 18%

If it is taxed at higher rate of 28% then most property sold will now be subject to 28% CGT. (Assuming the owner has any sort of job)

No-one can answer this question yet.

If the answer is other than "still taxed at 18%" the details will be in the full report which is released later. Though you are right that it needs addressing.

tim

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And where, pray, is this magical lodger going to appear from? I love the way wannabe LLs assume reliable people can be magicked out of nowhere, stay as long as you want, disappear upon convenience when your life changes and never cause a problem.

His plan is to buy his sister's flat off her as she moves up 'the ladder'. Not far from several Universities in Edinburgh. I do get your point, though.

Sorry - I just feel so let down and despondent today. Nothing much is going to change.

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  • 145 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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