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."

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Latest Comments

MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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Landlady14
Landlady14 01 Mar 2017

You would think so Niraj Shah! My experience only proves that there are varying qualitiers of professional in all aspects of property letting. None of the ones I have dealt with, from letting agents to...

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Mark
Mark 01 Mar 2017

Thanks for this article. Hopefully one day everybody's lifestyle will be eco-sustainable.

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Ben Taylor
Ben Taylor 28 Feb 2017

I was convinced that London was the most expensive!

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Alan Read
Alan Read 28 Feb 2017

Australia are leading the way in this I think. The trouble with Britain is we don't get enough sun to make use of solar power.

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James Powell
James Powell 27 Feb 2017

This is a very good news.

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DanHumphreys
DanHumphreys 27 Feb 2017

It sounds like a good idea. Anything to help the younger generation get a foothold.

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Matt
Matt 20 Feb 2017

Is this fake news?

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Matthew Hollywood
Matthew Hollywood 07 Feb 2017

Matthew Hollywood - Director Mishon Mackay Land & New Homes - Brighton The shortage of New Homes is in part effected by the lack of land sales. Land sales are held back because there is a disparity between...

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CommercialTrust
CommercialTrust 30 Jan 2017

Hi Graham, Would be interesting to see the above figure calculated against an investment via a Lt Company /SPV structure and if the investor found themselves pushed in to the higher tax bracket. Mortgage...

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