Posts with tag: Finance Bill

New-buy-to-let tax break proposed by MP

Published On: September 5, 2016 at 8:51 am

Tags: Buy-to-Let,buy-to-let landlords,Capital Gains Tax,Finance Bill,tax

A Conservative MP has called for a reduction in capital gains tax paid by buy-to-let landlords who sell their rental property to sitting tenants.

Kevin Hollinrake, founder of franchise agency Hunters, made his call through an amendment to the Finance Bill.

Tax alterations

In this year’s Budget, former Chancellor George Osborne announced that the 28% rate of capital gains tax would be slashed to 20% for most assets. However, he did not include residential property in this list.

Industry professionals have repeatedly complained about this exception, particularly as it comes on top of alterations to mortgage interest tax relief and Wear and Tear allowance.

Before the proposed amendment by Mr Hollinrake, the Residential Landlords Association called for an exception to encourage landlords ready to sell properties to do so.

Research from the Residential Landlords Association discovered that 77% of private landlords would think about selling their property to tenants, should tax liability be amended.

New-buy-to-let tax break proposed by MP

Future considerations

Policy director at the Residential Landlords Association, David Smith, said, ‘many landlords are now considering their future in the market following recent tax increases whilst others will be looking to sell as part of the natural churn of properties in the rental market.’[1]

‘This amendment would help achieve the Government’s aim of encouraging and supporting home ownership for aspiring first-time buyers whilst easing some of the excessive tax burdens recently placed on landlords,’ Smith added.[2]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/9/agency-chief-turned-mp-is-calling-for-new-buy-to-let-tax-break

Tax changes will not be detrimental to landlords-NLA

Published On: September 1, 2016 at 11:11 am

Author: Em Morley

Categories: Landlord News

Tags: Buy-to-Let,Finance Bill,national landlords association,tax changes

The National Landlords Association has moved to issue a report in an attempt to calm fears relating to late tax additions to the Finance Bill at Committee Stage.

There is growing concern that these amendments regarding land and capital tax will have yet another negative impact on buy-to-let landlords.

Impact

Earlier this week, The Law Society suggested that profits generated from the sale of buy-to-let property could be subject to income tax instead of capital gains tax as a result of the changes.

However, the National Landlords Association believes that the planned alterations to the Bill will not have a detrimental effect. The Association points to the fact that these measures, ‘were part of the anti-avoidance measures promised in the Budget.’[1]

New clauses to be added to the Finance Bill will involve legislation announced in the 2016 Budget. This will include a specific alteration to income or corporation tax on profits generated from the disposal of land in the UK.

These clauses will make sure that offshore structures cannot be utilised to avoid UK tax on profits made from dealing in or developing land in Britain.

Tax changes will not be detrimental to landlords-NLA

Ambiguous

Despite the rather ambiguous wording, the National Landlords Association said it is, ‘reassured by the then Chief Secretary to the Treasury’s explanation of the new clauses in July.’ This includes a comment which reads: ‘this measure is targeted at those who have a property building trade; it does not impact the tax profile for investors in UK property.’[1]

With the Report Stage for the Bill coming up next week, the National Landlords Association has confirmed with HMRC officials responsible that these changes are not intended to alter existing tax arrangements between buy-to-let landlords and HMRC.

The NLA said in a statement, ‘HMRC considers that generally property investors that buy properties to let out to generate property income and some years later sell the properties will be subject to capital gains on their disposals rather than being charged to income on the disposal.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/8/tax-amendments-will-not-adversely-affect-landlords

MP Supports Tax Cuts for Private Landlords

Published On: July 4, 2016 at 9:10 am

Author: Em Morley

Categories: Landlord News

Tags: Capital Gains Tax,Finance Bill,landlord taxes,private landlords,property investment,rental property

MP Supports Tax Cuts for Private Landlords

An MP has spoken out in Parliament in support of tax cuts for private landlords, insisting that they should not have been excluded from a Capital Gains Tax (CGT) reduction revealed by the Chancellor in his Budget statement.

Kevin Hollinrake, a Conservative MP and co-founder of Hunters estate agents, believes that George Osborne should not have denied landlords a tax break on their property profits.

Landlords face a hefty 28% CGT bill when they sell their buy-to-let properties, a rate that the Chancellor himself has described as one of the highest in the developed world.

Residential property was deliberately excluded from the tax cut, which will see investors in other asset classes benefit from a reduction from 28% to 20% in the higher rate of CGT, and from 18% to 10% in the basic rate.

Hollinrake is tabling an amendment to Clause 72 of the Finance Bill, which would extend the new 20% CGT rate to private landlords when they sell their rental properties to a sitting tenant.

The motion to put the measure into an amendment to the Finance Bill, which is currently going through Parliament, was originally suggested by the Residential Landlords Association (RLA). The organisation believes that a growing number of landlords are now thinking of leaving the buy-to-let sector, as property investment becomes financially unsustainable for them.

Recent research from the RLA found that a huge 77% of private landlords would consider selling their property to tenants if the rate of CGT was reduced.

The RLA is now urging its members to write to their local MP, encouraging them to back the proposed change to the Finance Bill.

Ahead of the Chancellor’s Budget statement earlier this year, the Royal Institution of Chartered Surveyors also called for landlords to be exempt from paying CGT if they sell their properties to tenants.