CGT Changes and Furnished Holiday Lets by Letting Focus
There is still a considerable clamour on the chancellor to amend his plans on changes to simplify capital gains tax to make it more palatable to businesses.
We will have to wait and see – but I don’t think much will change – as there will be too much political face to be lost if Darling changes things now.
Furnished Holiday Lets
One class of investors who lose out is people with furnished holiday lets. Unlike buy to let investors, who generally gain under the proposed move to an 18% flat capital gains tax rate, owners of furnished holiday homes will lose out.
This is because they are treated just like any other business and currently get a different more generous type of taper relief called Business Asset Taper Relief (as opposed to the “Non Business” version that applies to buy to lets).
With this only 25% of the gain was taxable after owning for 2 years or more – giving a higher rate taxpayer a rate of effectively just 10% to pay.
With the new flat of 18% rate, they will pay more from April 5th 2008.
Then again, there could be a compensating factor at work here too. As a result of the lower CGT rates on second homes, more people will buy second homes for themselves. This could increase the value of houses in rural and coastal areas - just those places where where there are many holiday lets.
ABOUT DAVID LAWRENSON and LettingFocus
We are LettingFocus.com - the property letting experts and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased buy to let information for investors at our seminars as well as one to one (or two) focussed consulting advice covering all aspects of being a landlord and investing in property.
Unlike many in the still largely unregulated buy to let and property “advice” business we are not linked to a property company, developer, estate agency or bridging loan provider and so can be relied on for unbiased and independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price. I can also explain how to reduce the risk of getting a bad tenant.
CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:
Our Events only take place twice a year.
For our NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors click here:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS for landlords too, Click here: Services and Products for Landlords to see our Landlords Resources (Useful Links) page. (Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!)
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
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Read this interesting article from our Articles page: http://www.lettingfocus.com/pages/myarticles12.html
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Copyright: David Lawrenson 2007. This blog is updated at least once a week
We will have to wait and see – but I don’t think much will change – as there will be too much political face to be lost if Darling changes things now.
Furnished Holiday Lets
One class of investors who lose out is people with furnished holiday lets. Unlike buy to let investors, who generally gain under the proposed move to an 18% flat capital gains tax rate, owners of furnished holiday homes will lose out.
This is because they are treated just like any other business and currently get a different more generous type of taper relief called Business Asset Taper Relief (as opposed to the “Non Business” version that applies to buy to lets).
With this only 25% of the gain was taxable after owning for 2 years or more – giving a higher rate taxpayer a rate of effectively just 10% to pay.
With the new flat of 18% rate, they will pay more from April 5th 2008.
Then again, there could be a compensating factor at work here too. As a result of the lower CGT rates on second homes, more people will buy second homes for themselves. This could increase the value of houses in rural and coastal areas - just those places where where there are many holiday lets.
ABOUT DAVID LAWRENSON and LettingFocus
We are LettingFocus.com - the property letting experts and I’m David Lawrenson, the author of “Successful Property Letting” - the UK’s top selling property and buy to let book for the last 3 years.
I have been a landlord and property investor myself for over 25 years.
At LettingFocus we offer independent unbiased buy to let information for investors at our seminars as well as one to one (or two) focussed consulting advice covering all aspects of being a landlord and investing in property.
Unlike many in the still largely unregulated buy to let and property “advice” business we are not linked to a property company, developer, estate agency or bridging loan provider and so can be relied on for unbiased and independent advice on where to buy (which areas), what type of property to buy, when to buy and how to buy property at a low price. I can also explain how to reduce the risk of getting a bad tenant.
CHECK OUT THESE PAGES AT OUR SITE LETTINGFOCUS.COM:
Our Events only take place twice a year.
For our NEXT SEMINAR AND NETWORKING EVENT for Landlords and Property Investors click here:
Next Property Investing Seminar and Networking Event
We have GREAT OFFERS for landlords too, Click here: Services and Products for Landlords to see our Landlords Resources (Useful Links) page. (Selling services to landlords and property investors and have a national coverage? You could be a partner, please get in touch!)
For general info on our SEMINARS AND CONSULTING click here: Property Seminars, Networking Evenings and Consulting
ONE TO ONE CONSULTING click here: Property Consulting
CLIENT TESTIMONIALS from past customers click here: Testimonials
BUY THE BOOK click here: Buy the Book at Amazon
THE HOME PAGE OF THIS BLOG click here: Blog
THE HOME PAGE OF OUR MAIN SITE click here: LettingFocus Home Page
To JOIN our Free QUARTERLY NEWSLETTER simply send an email to david@LettingFocus.com - Please note we WILL NOT send spam or sell our mailing list to advertisers!
IF YOU HAVE A WEB SITE FOR LANDLORDS WHY NOT LINK TO THIS BLOG OR TO OUR WEBSITE?
Worried about becoming a victim of credit fraud and ID fraud?
Read this interesting article from our Articles page: http://www.lettingfocus.com/pages/myarticles12.html
Keep Up to Speed
To keep up to speed on latest blogs, over on the right hand side under all the previous blog entries you will find a button which says “Site Feed.” Simply copy the site feed link into your News Reader or News Aggregator.
If you have a website & are thinking of reproducing material here, that’s fine but we DO require a link to the blog to be included, including also all the links in this section. (The full article including all links must be available to ALL VIEWERS of your site and not restricted.)
TO VIEW RELATED POSTS select a “Category” at the bottom of this page.
WANT TO ADD A COMMENT OR VIEW OLD COMMENTS?
To add a comment to this post, simply click on “link to this post” to add your comment and to view comments of other people.
Copyright: David Lawrenson 2007. This blog is updated at least once a week
Labels: capital gain tax changes, furnished holiday lets, GGT on property, property tax, tax and buy to let
This entry was posted by lettingfocus, on
Thursday, October 25, 2007.
