Capital Gains Tax - Stand up and be counted -Treasury plan Capital Gains Tax raid
Following a General Election campaign, where housing was barely mentioned, the new Government should be focused on encouraging investment in residential property.
On the contrary the rumoured new CGT regime would act as a significant disincentive for landlords considering further investment.
A flat rate of 18 per cent on capital gains on non-business assets is likely to be replaced by rates which mirror income tax bands and therefore represent a significant increase.
The NLA is calling on the Treasury to recognise letting as a legitimate business and therefore include capital gains from the sale of residential property in the wide-ranging “generous exemptions” which have been hinted at by Government.
Speculation continues to grow that Capital Gains Tax will be reformed.
Government has indicated that it plans to tax 'non-business gains' at a similar rate to Income Tax. For landlords this could mean a return to 40% or 50% tax on gains when selling property, as residential letting is treated as a 'non-business' activity.
NLA is calling on Goverment to recognise the real difference between short term speculation and long term business planning by landlords.
To help ensure that investment in housing remains viable they are calling for:
Recognition that owning rental property is a business activity and not speculation.
Introduction of CGT relief, or a reduced rate, for assets held over a number of years.
A commitment to maintain a meaningful 'Annual Exempt Amount' - similar to the Income Tax Personal Allowance.
Extend Roll-over Relief to encourage the reinvestment of gains into areas of housing need.
A delay until April 2011, to allow landlords to fully assess how their business (and tenants) will be affected.
PLEASE SUPPORT THEIR CAMPAIGN:
The Government will be announcing its plans at an emergency budget on 22 June 2010.
They need the Government to understand the strength of feeling from the entire British landlord community about the proposed changes.
Please support their campaign by writing to your MP NOW by using their online form here.
If you are a Landlord, do support their campaign and if you are not a member of the NLA, why not join Now?