Warning - Higher rate of CGT could still effect basic rate tax payers!

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Dear Landlords,

The new higher rate could still effect you even though you are a lower rate tax payer!! Go to today's The Telegraph (24/06/10) some of which I have reproduced here:

...'accountants gave warning that many basic-rate taxpayers could have been misled by Mr Osborne's statement during the Budget.
The Chancellor said: "Low and middle income savers who pay income tax at the basic rate make up over half of all capital gains taxpayers. They will continue to pay tax on their capital gains at 18 per cent."
Frank Nash, partner at Blick Rothenberg, said: "They may well be basic rate taxpayers, but any gains they make on selling an asset is treated by the taxman as if it were income. This could well force them into a higher-rate tax bracket.
"With shares and antiques, that's fine because you can sell a little bit at a time and make sure you don't go into the higher rate. But with property there's nothing you can do about it. You have to sell all of the property at once.
"The majority of long-term property investors will be pushed into the higher tax band."
The National Landlords Association said it believed "the vast majority" of Britain's one million buy-to-let landlords would, on selling their investment, fall into the higher 28 per cent rate, because most are long-term investors sitting on profits of well over the 10,100 threshold.
Someone earning 26,000 a year and normally a basic-rate taxpayer, for instance, will be pushed into the higher-rate bracket if they have a taxable profit of 12,000 or more, because this capital gain would push them into the higher-rate bracket which starts at 37,400.'


24/06/2010 00:00

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