Chancellor urged not to introduce tax hike

The chancellor, Rishi Sunak, has been urged not to introduce a capital gains tax increase after the Office for Tax Simplification (OTS) suggested last week that a doubling of rates and a reduction in exemptions could raise around £14bn.

This has triggered fears that buy-to-let landlords, investors, those with second homes, and small business owners could face significantly higher tax bills.

David Alexander

David Alexander, joint chief executive office of apropos, commented: “The OTS review of CGT suggesting a huge increase in the rate of taxation for landlords, second home owners and investors would have an enormously detrimental impact on the housing market.”

Targeting the private rented sector is “extremely risky” as it is the second largest provider of homes in the UK and it would be impossible to fill this gap if there was a mass exodus of landlords and investors from the market over a short period, according to Alexander.

He added: “Any large-scale exit from this market would flood the market with homes depressing prices at a time when the property sector is in desperate need of support.”

A major think tank yesterday warned the Treasury against potentially damaging the economy by increasing CGT.

Tom Clougherty, a tax specialist at the Centre for Policy Studies (CPS), said: “Fully aligning CGT with income tax would be a big mistake. Doubling the tax paid on capital gains would deter investment, punish saving, and leave us with a very uncompetitive system internationally.

“The government should simplify the tax system but needs to make sure it also supports entrepreneurs, savers, and economic growth.”

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2 Comments

  1. paulgbar666

    All that will happen is LL will decline to sell.

    Better to keep yield going than lose it all by selling up.

    This would mean far fewer properties coming to market for potential FTB.

     

    Though it isn’t stock levels that is preventing FTB.

    Most of them simply haven’t the deposits saved.

     

    But unless a LL needs or wants to sell then it makes sense hanging on to properties to avoid crystalising the larger CGT take.

    So that would mean even less CGT for Sunak who wants the money now!!

    Especially as it would advance his leadership plans by hitting those nast 2nd property owners most of whom are LL.

     

    So electorally very popular with most of the electorate!!

     

    Anyone with property assets in excess of their PPR is to be royally screwed!!

    Perhaps time now to take the cheaper CGT hit and invest in the biggest PPR you can.

    Lodgers could be taken on if desired.

    But if new tax increases are introduced it will just stifle business.

     

    No point in selling if you face a massive CGT bill.

     

    Best to just keep sweating the asset for as long as you can.

    It is a well known fact that buying and selling of properties contributes massively to GDP which generates lits of taxable revenues.

     

    Reduced sales means reduced GDP means reduced taxes!!

    So increase CGT at your peril!!

     

     

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  2. Woodentop

    Sell, Sell, Sell while you can?

     

    Now the government is looking at increasing the minimum EPC Threshold to a Band C you could end up with a property you can’t sell and if you do and they stuff you with double CGT … phone the Samaritans.

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