Quote Ref: WS1

UKinsuranceNET will be open over the holiday season – but we will be making some slight alterations to our usual hours –
Friday 15th December: 8:30am to 4pm ~ Friday 22nd December: 8:30am to 5pm ~ We will be closed Christmas Day and Boxing Day ~ Wednesday 27th December: 9:00am to 5pm ~ Thursday 28th December: 9:00am to 5pm ~ Friday 29th December : 9:00am to 5pm ~ Saturday 30th December: Closed ~ We will be closed New Years Day

Capital Gains Tax – no joy for landlords

photodune-1464921-uk-money-s.jpg

While the Budget earlier this year gave property owners who sell up some tax breaks, sadly, landlords were omitted.

The then-Chancellor George Osborne announced that he was slashing the rate of tax paid on capital gains (CGT). But not, however, for investors who are selling property.

The changes meant that landlords do not benefit from the new rate of 20% for higher rate taxpayers and 10% for lower rate taxpayers who are selling their own private residence.

Instead, investors still face paying a substantial 28% (or 18%) capital gains tax bill when they sell. The liability is payable irrespective of whether a landlord intends to reinvest these gains or not.

Who pays CGT?

Individuals: As long as they are eligible for full Private Residence Relief, capital gains tax is typically not payable when an individual sells their main residence. The sale of land (or interest in land) or another property where a financial gain is made, however, will generally attract a charge.

Businesses: If their intention is to reinvest their gains, businesses can take advantage of roll-over relief against CGT upon the disposal of various business-related assets – subject to the gains being reinvested in the business.

Private landlords: Even though they are classed as a business too, private landlords, however, are not able to claim ‘roll-over’ relief. This potentially obstructs ongoing investment in their business, as well as landlords who have made poor investments suffering.

The overall effect could be less flexibility in the PRS at a time when housing is really needed, landlords being unable to change as housing needs do, and, ultimately, rents being put up …

Further reading: National Landlords Association Campaign

There are currently no comments

Leave a Comment

* Indicates a required field