So who will pay the new capital gains tax rate?

So who will pay the new capital gains tax rate?

The chancellor has announced that the headline rate of Capital Gains Tax will be cut from 28% to 20% and CGT paid by basic rate taxpayers from 18% to 10%.

The government is also introducing a brand new 10% rate on long term external investment in unlisted companies, up to a separate maximum of £10 million of lifetime gains.

David Gibbs, Partner at Alliotts Accountants in London said: “So Who Will Pay the new rate of Capital Gains Tax?  Not the buy to let investor, as the Chancellor’s paranoia towards hard working middle England investors continues as he announced cuts to the main rate of capital gains tax but specifically excluded gains on buy to let properties. The extra stamp duty on purchase and the withdrawal of tax relief on mortgage interest payments was repeated, leaving the 250,000 buy to let investors in the South East feeling out in the cold.

But capital gains tax on the sale of shares in private companies will apply to all investors for shares acquired from 17 March - previously you had to be an employee and own at least 5% of the business to get this rate.So, who’s left to pay the new rate of 20%? I guess that’s those with large listed share portfolio’s and financial investments.

I wonder if they know George?”


George Osborne said:"Our Capital Gains Tax is now one of the highest in the developed world, when we want our taxes to be among the lowest. The rates will come into effect in three weeks’ time. The old rates will be kept in place for gains on residential property and carried interest."

Tina Riches, national tax partner at Smith & Williamson, commented: "Not all investors or businesses count for the lower entrepreneurs’ relief rate, so the general reduction in CGT rates for higher rate taxpayers from 28% to 20% will encourage further investment in companies, helping to boost investment for those not eligible for entrepreneurs’ relief. Ultimately, this reflects the Chancellors leaning towards the enterprise economy, partly at the expense of owners of buy to lets and second homes.
 
Basic rate taxpayers will also benefit where investment meets the Chancellor’s criteria, with a rate drop from 18% to 10%, providing help for those with large share portfolios who may be hit from April 2016 by the higher taxes on dividends. This is likely to mean taxpayers reconsidering their portfolios."

Join our mailing list:

Leave a comment



Our Next Event

Buy-to-Let Roadshow July 2017

Buy-to-Let Roadshow July 2017

Newcastle - 18/07/2017

Bolton - 19/07/2017

Derby - 20/07/2017

Reading - 21/07/2017

Register now

Latest Comments

SecomTech
SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

view article
Bertrand
Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

view article
AmberMorris
AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

view article
Oliver Conway
Oliver Conway 18 May 2017

Making a neat inventory is a good idea, but if the seller is not willing to provide it, can the buyer demand it?

view article
Bertrand
Bertrand 17 May 2017

First step to nationalisation of the private rented sector IMHO. Nanny state poking their noses into things yet again. I object, as a decent landlord, sometimes having to deal with some pretty awful tenants,...

view article
Izzy
Izzy 16 May 2017

This is such a great a post. I love the detail you've gone into. It's a very useful article for helping those who are looking at deciding which sector they would like to go into! When I first started investing...

view article
paul burnham
paul burnham 30 Apr 2017

Jeremy Corbyn's pledge that a Labour government would build 500,000 new council houses must electrify the general election campaign. Reliance on markets and the profit motive has brought huge housing-related...

view article
CommercialTrust
CommercialTrust 28 Apr 2017

Sadiq Khan?s announcement of an online database of landlords and letting agents who have been convicted of housing offences, appears on face value to be a variation of the already implemented Database

view article
warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

view article
Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

view article
Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

view article
MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

view article

Related stories

More articles from Finance

Buy-to-Let Roadshow
July 2017

18th-21st July

4 days
7 specialists
4 locations
Free to attend

Click here to register now