zoomraker Posted October 15, 2007 Share Posted October 15, 2007 thanks in advance Quote Link to comment Share on other sites More sharing options...
Orbital Posted October 15, 2007 Share Posted October 15, 2007 LLs will pay less of it when they sell. Its not hard! Quote Link to comment Share on other sites More sharing options...
Andoving Posted October 15, 2007 Share Posted October 15, 2007 I have heard that not all BLTs will have the benefit of calling their rental property a business and therefore will not get the 18% CGT. Clarity is needed guys. Quote Link to comment Share on other sites More sharing options...
Guest muttley Posted October 15, 2007 Share Posted October 15, 2007 It benefits flippers, but penalises BTLs who, as we know, are in it for the long term. Quote Link to comment Share on other sites More sharing options...
lordofcolchester Posted October 15, 2007 Share Posted October 15, 2007 18% should apply to all disposals. The distinction between business assets and non business assets is being withdrawn. Currently the lowest rate of CGT is 10% and this applies to business assets that have been owned for a certain period of time. The lowest rate for non business assets is higher than this. You are right in stating that BTL'ers may have trouble in claiming that their flats are business assets but this will not apply from next April as there is only one rate of tax regardless on what type of asset it is and how long you have owned it for. Quote Link to comment Share on other sites More sharing options...
Daft Boy Posted October 15, 2007 Share Posted October 15, 2007 LLs will pay less of it when they sell. Its not hard! Not true. Some LLs will pay more because of loss of taper relief. Quote Link to comment Share on other sites More sharing options...
zoomraker Posted October 15, 2007 Author Share Posted October 15, 2007 Not true. Some LLs will pay more because of loss of taper relief. So this could make a crash more likely as LLs who have entered the market recently will have a greater incentive to sell and would be able to accept less as they are not going to lose 40% of any profit they may have. Could help get the ball rolling. Quote Link to comment Share on other sites More sharing options...
Bear Goggles Posted October 15, 2007 Share Posted October 15, 2007 (edited) More specifically, it favours speculators over investors. This is why both the CBI and the Unions and everyone else apart from idiots like Rosie Dullard are annoyed. Example under current tax regime: Flipper buys flat, leaves empty sells for profit 12 months later = 40% CGT on profits Businessperson starts business, builds up profitable concern though hard graft, sells to larger competitor a few years later = 10% CGT The same example under from next April: Flipper buys flat, leaves empty sells for profit 12 months later = 18% CGT on profits Businessperson starts business, builds up profitable concern though hard graft, sells to larger competitor a few years later = 18% CGT So there you see, hard work - penalised, speculation - rewarded. Thank you, Darling! Edited October 15, 2007 by Bear Goggles Quote Link to comment Share on other sites More sharing options...
Disillusioned Posted October 15, 2007 Share Posted October 15, 2007 More specifically, it favours speculators over investors. This is why both the CBI and the Unions and everyone else apart from idiots like Rosie Dullard are annoyed.Example under current tax regime: Flipper buys flat, leaves empty sells for profit 12 months later = 40% CGT on profits Businessperson starts business, builds up profitable concern though hard graft, sells to larger competitor a few years later = 10% CGT The same example under from next April: Flipper buys flat, leaves empty sells for profit 12 months later = 18% CGT on profits Businessperson starts business, builds up profitable concern though hard graft, sells to larger competitor a few years later = 18% CGT So there you see, hard work - penalised, speculation - rewarded. Thank you, Darling! Good post. Quote Link to comment Share on other sites More sharing options...
Sledgehead Posted October 15, 2007 Share Posted October 15, 2007 I have heard that not all BLTs will have the benefit of calling their rental property a business and therefore will not get the 18% CGT. Clarity is needed guys. You have this arsy-tarsy. Under the current regime (ie prior to the changes), those who can prove their lets constitute a bonafide business, are able to class their porfolio as a "business asset" (zoomraker needs to look this up if he/she wants to write a letter). Currently, business assets attract only 10% cgt if held for 2 years or more. Post 6th April 08, ALL assets attract cgt of 18%. This means that portfolios large and complex enough to be classed as a business, will find themselves subject to 18% tax rather than 10% tax. There is thus an insentive for such portfolios to liquidate assets (that have seen capital gains) prior to the rule changes that occur on April 6th 08. Smaller portfolios that could not qualify as business assets will see their cgt bill reduced for all but lower rate tax payers with accummulated taper relief. Quote Link to comment Share on other sites More sharing options...
zoomraker Posted October 15, 2007 Author Share Posted October 15, 2007 This is very interesting. It seems the changes are not as simple as they first appear and it is hard to predict what their effects on the housing market will be. If their is a crash I could see this as being one of the things which gets the blame pinned on it. Quote Link to comment Share on other sites More sharing options...
Warwick Posted October 15, 2007 Share Posted October 15, 2007 (edited) To clarify, the 10% CGT due is as a result of 75% Business Asset Taper Relief (BATR) after 2 years = 25% (taxable) @ 40% (max tax rate) = 10%. There are actually 3 CGT tax rates for 2007-08: 10%, 20% and 40%. CGT on small taxable gains could be as low as 2.5% (25% @10%) up to £2230 or 5% (25% @ 20%) up to £34,600. This is per owner, so can be double for a Married Couple or Civil Partners. Most (99.99%) BTLers will not get BATR. Edited October 15, 2007 by Warwick Quote Link to comment Share on other sites More sharing options...
Zzzzzzzzzzzzzzzzzzzzzzzzzz Posted October 15, 2007 Share Posted October 15, 2007 I can't see it getting through - there's so much anger in the SME sector, and in the City as well. Quote Link to comment Share on other sites More sharing options...
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