Capital Gains Tax Rise

[resident]

With the imminent rise in CGT, the RLA are campainging for Landlords not to be affected, please see below:

Capital Gains Tax is threatened to rise to 40% in the new coalition government's budget on June 22.

The RLA is actively campaigning to persuade the government Not to hit landlords with this Tax on Inflation.

You can play your part by writing to your newly-elected MP and make landlords' views know.

Forty-percent CGT will stop the market unless Landlords get:

• Taper relief for long-term property investment
  
• Roll-over tax relief to allow you to reinvest
  
• Tax allowances for major improvements and renovations
  
• Tax allowances for better energy efficiency in older properties
  
• Landlords must be distinguished from second-home owners
  

The coalition agreement published on 20th May stressed:

"We will seek ways of taxing non-business capital gains at rates similar or close to those applied to income, with generous exemptions for entrepreneurial business activities."

Please support our call for landlords to be treated as an 'enterpreneurial business activity' for Capital Gains Tax purposes. This can be done without affecting any alternative treatment for second homes, simply by insisting it is restricted to let property, as evidenced by a written tenancy agreement.

Most residential landlords are investing in property for long-termer considerations, saving for their retirement, long-term care, or to pay for their son or daughter's education. If CGT rates, say, double for landlords, it would eat significantly into landlords' savings and will be seen by many as a raid on their pension funds.

Follow http://www.rla.org.uk/html/mp_letter.shtml to send a letter to your MP – you can write to more than one MP if you have property in different areas.

Thank you in advance for your support.

Regards,

Residential Landlord

[Melboy]

I have written to my MP about this CGT fiasco and I have had a reply back yesterday....................

He has assured me that the depth of feeling on the Tory/Lib/Labour back benches is wholly against this blanket rise of CGT and that they will petition the Chancellor NOT to implement this CGT without an in-depth study into it and taper relief MUST be included for long term aquisitions and that includes Landlord's property holdings etc.

We shall have to wait and see what the budget brings.

Mel.

[isabelm@isabelm.plus.com]

[isabelm@isabelm.plus.com]

It might be of some interest to others to note that on the disposal of a flat in tax year 2009/10, the Capital Gains Tax we are paying, based on the 18% CGT rate, is almost exactly the SAME as the CGT we would have paid under the previous regime of 40% tax with indexation and taper relief.

Why should 18% = (40%-index-taper relief) ?

Because we owned the flat for a full 23 YEARS!!!!

If the new government wants to increase CGT to 40% again **without** incorporating inflation reliefs, then they'll be encouraging short-termism and speculation. That's the kind of approach that caused the country's debt to go through the roof and the banks to collapse......