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Stamp Duty Three Month Extension & CGT Hike


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7 minutes ago, longgone said:

"Stamp duty holiday ‘to be extended until end of June saving buyers £15,000"

🤣

i spent 50k more to save 15k 

The time for rationalising, reasoning, measured consideration of the housing situation in this country is long gone. The world has gone nuts, exemplified by the amount of other people's / magicked up /borrowed money people are prepared to throw at a house. 

Are these people supposed to be thinking, aware, savvy buyers?

I need to remove myself from looking at the situation, because I will actually go insane. 

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2 minutes ago, Trump Invective said:

The time for rationalising, reasoning, measured consideration of the housing situation in this country is long gone. The world has gone nuts, exemplified by the amount of other people's / magicked up /borrowed money people are prepared to throw at a house. 

Are these people supposed to be thinking, aware, savvy buyers?

I need to remove myself from looking at the situation, because I will actually go insane. 

i did that years ago. nothing makes any sense to me. The concept of working to earn money is gone. 

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3 hours ago, Huggy said:

If we get to that point, I will ask myself the question "is 6 years living abroad worth £1.5m savings?" (or whatever the actual savings and number of years may be).

The answer might be an easy 'yes'.

If you are a citizen or have permanent residence in another country (something you would need to stay for. Any length of time), and if you stand to save that much, and the country you are going to doesn’t tax the heck out foreigners at some point to pay for the COVID mess, then makes sense. However, I wouldn’t trust other governments not to tax rich overseas types once the COVID bill lands on the doorstep...they are the softest of soft targets for populist politicians and garner zero sympathy from anyone...and rightly so. If you have made £3 million out of Bitcoin, you would do better to pay your dues to society, stay here, and avoid the headaches.

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3 hours ago, wighty said:

To the argument it will detract entrepreneurs i don't buy it. Many won't risk buying shares if you lose 45% of the profit.

Most don't do it for the money. Of course they do. Do you think BTLers do it for fun?.

 

If he meddles too much with CGT, the stock market will crash.

You think a BTLer is an entrepreneur? :D They're not. There's a distinction to be made between someone setting up a business, growing that business and selling it on and someone speculating on property, shares, BitCoins etc. 

 

What CGT adjustment would cause a stock market crash out of interest?

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1 hour ago, longgone said:

"Stamp duty holiday ‘to be extended until end of June saving buyers £15,000"

🤣

i spent 50k more to save 15k 

If you spent £50K more and house prices rose 8% then this particular house went from £625 to £675. 

With the SDLT saving that's £35K. However, this isn't FTB territory so assuming they had a place to sell for even half of this (which also increase by the same 8%) that got them £25K. All in for £10k to move house .... but there's more of course. 

If that £15K cash that wouldn't gone to the govt was put to get them from an 86% LTV to an 85% LTV their interest rate would have fallen giving them a saving over time too. 

On top of that the larger mortgage is getting eroded by inflation so the bigger the mortgage the bigger the real gain each year (for now at least anyway). 

Finally given the sheer amount of choice and time to secure a buyer it was certainly a good time to move since the biggest problem for most people is finding a buyer, swiftly followed by finding a place they like. 

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53 minutes ago, longgone said:

and pay 45% in CGT 

personally i would make crypto 49% so they have a slight advantage. 

You're assuming there will be a state left to collect on it if/when people decide to sell.

Besides, there is a personal exemption for some amount (for now)

Technically, CGT is levied on houses (yes, even primary residences) but the government has chosen to waive that (again, for now)

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4 minutes ago, Unmoderated said:

You think a BTLer is an entrepreneur? :D They're not. There's a distinction to be made between someone setting up a business, growing that business and selling it on and someone speculating on property, shares, BitCoins etc. 

 

What CGT adjustment would cause a stock market crash out of interest?

Was responding to entrepreneur in the widest sense. (BTL probably see themselves as such).  

As you rightly say there is a distinction, so why have the same rate?.

45%CGT will discourage investment in general.  If that is the rate then the risk of stocks and share purchases will be unpalatable for many new investors.

 

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1 hour ago, HovelinHove said:

If you are a citizen or have permanent residence in another country (something you would need to stay for. Any length of time), and if you stand to save that much, and the country you are going to doesn’t tax the heck out foreigners at some point to pay for the COVID mess, then makes sense. However, I wouldn’t trust other governments not to tax rich overseas types once the COVID bill lands on the doorstep...they are the softest of soft targets for populist politicians and garner zero sympathy from anyone...and rightly so. If you have made £3 million out of Bitcoin, you would do better to pay your dues to society, stay here, and avoid the headaches.

My plans will change as soon as the environment changes and I'll hope to avoid any of the newly impoverished taxy taxy countries if I can. It's only one option, I'm sure there are easier and harder ones, with a lesser and greater amount of savings available for each. A 45% additional rate of CGT is only hearsay anyway and that might move when it comes to sell.

As for paying my dues, I believe I have done so through PAYE, VAT and CGT for decades, as well as zero fecking interest rates for 13 fecking years. Also, the FCA stopped crypto savings in the tax free ISA thing for my own protection too. Society, at this moment, can do one. This is me time :)

Edited by Huggy
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1 hour ago, Freki said:

CGT is the same as stamp duty, a tax on transaction. Bad tax when it comes down to property. Get rid of it and replace it with a property tax based on valuation actualised every year 

CGT is not a tax on a transaction, it is a tax on nominal profits.

If they are going to align CGT with income tax, they need to do bring back inflation indexing to ensure that this is a tax on real gains.

I would have thought that an easy win for CGT would be to remove the annual allowance. At over £12k, this is extremely genererous IMO, and overwhelmingly benefits the well off. The vast majority of middle and lower income earners would struggle to fill their annual ISA allowances, so rarely need to consider CGT at all.

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37 minutes ago, wighty said:

Was responding to entrepreneur in the widest sense. (BTL probably see themselves as such).  

As you rightly say there is a distinction, so why have the same rate?.

45%CGT will discourage investment in general.  If that is the rate then the risk of stocks and share purchases will be unpalatable for many new investors.

I agree there's the distinction and I agree there should be entrepreneur relief for people disposing of a business they've worked in for X years and own X% of blah blah......

Saying a 45% CGT rate would discourage investment is fair enough but does it stop people working? Why not just align it to the income tax rate? IMHO it's crazy we allow people to keep more of their unearned income than their earned income. 

Saying that nobody would buy anything because of a 45% CGT is just something I'd utterly disagree with. Sure, it might make the current tech boom less likely (and those of the past) but people buying sensible shares for income etc wouldn't budge. Also, people sacrifice the most precious thing they have - time - for an income they kiss up to 45% of it goodbye to so i've the choice I'd take 45% of a gain I didn't do anything for than work a 50 hour week and have the same tax rate. Just my take on it. 

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42 minutes ago, NoHPCinTheUK said:

I am sure they will show up with some measure that will allow people to take money from their pensions accounts.

Brokenshire suggested exactly this. I've been concerned for a while this would be the next prop and it'll be a big one.

Since auto-enrolment most young professionals seem to treat pension contributions as just another tax or student loan contribution. Getting all this money back for housing will cause feeding frenzy from naive buyers. 

Edited by sammersmith
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50 minutes ago, mattyboy1973 said:

CGT is not a tax on a transaction, it is a tax on nominal profits.

That happens only when the transaction is happening though. The basis of the tax is important but when the tax is due is as well another important factor.

If one wants to hold onto their assets ideally they should have to fork income to maintain those. The essence of capitalism is to have an ideal allocation of capital. Not to achieve rentierism by reaching a high enough orbit where your wealth self feeds itself without any significant additional work needed.

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15 minutes ago, Unmoderated said:

I agree there's the distinction and I agree there should be entrepreneur relief for people disposing of a business they've worked in for X years and own X% of blah blah......

Saying a 45% CGT rate would discourage investment is fair enough but does it stop people working? Why not just align it to the income tax rate? IMHO it's crazy we allow people to keep more of their unearned income than their earned income. 

Saying that nobody would buy anything because of a 45% CGT is just something I'd utterly disagree with. Sure, it might make the current tech boom less likely (and those of the past) but people buying sensible shares for income etc wouldn't budge. Also, people sacrifice the most precious thing they have - time - for an income they kiss up to 45% of it goodbye to so i've the choice I'd take 45% of a gain I didn't do anything for than work a 50 hour week and have the same tax rate. Just my take on it. 

10% - 28% - 45% - 60%?.  At what point would you stop investing?. Maybe you'd swallow 45%. Fair enough, but many won't. 

Risk and reward will kick in. 45% income tax is different as people dont really have a choice not to work.

It wouldnt be a surprise if the total CGT £ revenue goes down if this were the case.

 

Anyway cant see him doing anything other than a bit of tinkering.

 

Even the Labour opposition, the Labour opposition are against tax rises.

https://www.msn.com/en-gb/money/other/keir-starmer-pushes-boris-johnson-to-rule-out-corporation-tax-rise/ar-BB1dYbb7?li=AAwnS0s

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8 minutes ago, Freki said:

That happens only when the transaction is happening though. The basis of the tax is important but when the tax is due is as well another important factor.

If one wants to hold onto their assets ideally they should have to fork income to maintain those. The essence of capitalism is to have an ideal allocation of capital. Not to achieve rentierism by reaching a high enough orbit where your wealth self feeds itself without any significant additional work needed.

GFY

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