Capital Gains Tax review may spell bad news for buy t...

Chancellor Rishi Sunak has requested a review of Capital Gains Tax rules from the Office for Tax Simplification - leading to speculation it may be the start of higher CGT on buy to let investments.

The OTS has published an online survey and a "call for evidence" to seek views regarding CGT, with the consultation closing on October 20.

This would mean new CGT rules, taking into consideration the consultation, could be presented at the autumn Budget expected in November.

According to the Treasury the consultation aims to "hear directly from individuals and businesses" as well as "professional advisers and representative bodies" about which aspects of capital gains tax are "particularly complex and hard to get right, and to hear any suggestions for improvements”.

Recently the influential Institute for Public Policy Research think tank called on government to tighten CGT on buy to let properties and second homes.

CGT has traditionally been lower on investment properties and other activities because they involve risk-taking, while heavier taxed income from employment and savings interest reflect their much lower risk.

However, CGT is already 10 per cent higher for the sale of buy to lets and second homes - at 18 per cent and 28 per cent for basic and higher rate taxpayers - than it is for investments.

In April HMRC changed its rules requiring UK residents to submit CGT returns, as well as pay any CGT due, within 30 days of completion of the sale of residential property - typically an additional home.

Previously, individuals under self-assessment could instead report the sale and pay across their liability through their next annual tax return.

Barry X
15 July 2020 16:32 PM

agreed..... it won't be long before there's some sort of BTL / 2nd HOMES "CGT SURCHARGE".... its been threatened for long enough.

One of the sad things is that since the days of Cameron, the "Tory" party have been steadily transforming themselves into a sort of "New Labour" (while "real" Labour moved further to the left). The Tories did this because - like most politicians - they are just unprincipled opportunists. They saw the way the world was going and rather than make a stand and/or attempt to do something about it (as well as differentiate themselves) they instead chose to make "Social Justice". Social Justice is of course a vague, undefined and totally nebulous piece of b***s*** that many people think they "believe" in without knowing what it means - because it doesn't actually mean anything!

Meanwhile, the whole country has been allowed for all those years to become more and more left-wing, muddled, screwed-up, anti-business - unless left-wing fantasies like "renewable energy" or related to "carbon" or "climate".... and of course necessarily very anti-landlord.

Best to get out if you can., and before they invent even more tax to take everything from us!

About 15 years ago I came across a strange case of a man who was on the run and in hiding in Spain because he'd committed a tax fraud BUT ironically had LOST money doing it!!! It makes me think of all the landlords (like us) who have taken risks and worked so damned hard for so many years (over two decades as LLs in our case) only to be made to LOSE money for all our hard work and the contributions we've made to help so many people along the way.