Buy to Let Tax Amendments to Finance Bill
I have read an article by Rosalind Renshaw which has flagged up that major amendments to the Finance Bill have been “slipped in” at committee stage, avoiding property consultation and scrutiny.
The changes if they are passed as currently worded in the Finance Bill could result in Buy to Let property owners paying Income Tax rather than Capital Gains Tax (CGT) on the profits when they sell.
Capital Gains Tax (cut in the 2016 budget) is 20% for high rate and 10% for basic rate tax payers.
Income Tax is charged at 45% for additional rate, 40% for higher rate and 20% for basic rate tax payers.
This change should it go through would double the amount of tax payable by Buy to Let investors when they sell.
The Law Society is challenging the government on this issue, and has made representations to the Government and HMRC.
It may be that the Government did not intend a material change to buy to let investors, and that the bill will undergo clarification within the bill before it is passed.
Treasury Minister David Gauke has told the Law Society that the measure was not intended to affect (buy to let) property investors, but was targeted for those in the property building industry.
Lets hope that is the case! I will keep an eye on this and report further in the news section of our website http://www.rlpm.co.uk/news.php if anything else comes to light!
Regency Lettings & Property Management