Chancellor requests review of CGT by the OTS

by Property118.com News Team

9:04 AM, 15th July 2020
About 9 months ago

Chancellor requests review of CGT by the OTS

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Chancellor requests review of CGT by the OTS

The Chancellor, Rishi Sunak, has requested a review of Capital Gains Tax (CGT) in an open letter to the Office of Tax Simplification (OTS). This could indicate the Chancellor is considering a future increase in the CGT levy in an attempt to shore up the UK’s finances.

However, this morning in a Sky interview, Secretary of State, Matt Hancock, confirmed there are no ‘current’ proposals to increase the wealth tax that would directly affect landlords more than most. The scope of the review will also include Principle Private Residence relief, but increasing tax on the sale of a main residence would be politically less popular than for second and investment homes.

The open letter written by the Chancellor to the OTS said:

“I would like the OTS to undertake a review of Capital Gains Tax and aspects of the taxation of chargeable gains in relation to individuals and smaller businesses.

“I would like this review to identify and offer advice about opportunities to simplify the taxation of chargeable gains, to ensure the system is fit for purpose and makes the experience of those who interact with it as smooth as possible, as set out in the agreed terms of reference.

“This review should identify opportunities relating to administrative and technical issues as well as areas where the present rules can distort behaviour or do not meet their policy intent. In particular, I would be interested in any proposals from the OTS on the regime of allowances, exemptions, reliefs and the treatment of losses within CGT, and the interactions of how gains are taxed compared to other types of income.

“Thank you for your ongoing work in reviewing the tax system and striving to make it simpler, fairer and better.”

CGT is currently charged at 10% on gains basic rate taxpayers and 20% for higher and additional rate taxpayers, or 18% and 28% respectively where the gains are made on residential property.

Comments

Beaver

14:25 PM, 15th July 2020
About 9 months ago

Reply to the comment left by David at 15/07/2020 - 13:38
I am aware that the basic pension has risen over the last decade. However, I am concerned that the chancellor will attack private pensions either with extra charges or by removing the recently introduced "pension freedoms". I am also concerned that the chancellor will raise the state pension age again.

Covid 19 didn't disrupt our economy: It was the government response that did that, as a consequence of advice from "experts". The response has looked like a c**k up to me right from the start, although I don't blame the government for that, I blame the "experts". And I am concerned that on the advice of other "experts" they will make the c**k up worse now.

Ours is a service economy: If the government wants a recovery and young people to be employed they need pensioners able to go out and spend their money, not too afraid to spend as they watch this, or subsequent governments attacking their pensions.

David

15:31 PM, 15th July 2020
About 9 months ago

Reply to the comment left by Beaver at 15/07/2020 - 14:25
Nothing is ruled out but raising these points with your MP at least shows your concerns and how to address them.

Monty Bodkin

16:57 PM, 15th July 2020
About 9 months ago

Reply to the comment left by Beaver at 15/07/2020 - 12:58
"Bank of England has also just forecast a 16% fall in house prices."

It hasn't.

In an interim financial stability report, they carried out a bank stress test of what would happen if prices fell 16%.
(They would be OK)

The media jumped on it to make some sensational headlines.

Question Everything

11:58 AM, 16th July 2020
About 9 months ago

I struggle with the thought from the original post - "I appreciate we all have to put our hands in our pockets to help put our economy back on its feet". Not a criticism of the author, I'm sure they have good intentions, I just see this as the consistently mislead train of thought. It is the speak of a co-dependant mindset, one who is always willing to "do what's best", and not question what the source of the problem really is. Bare with me.

There is no economy that we are collectively responsible for the recovery of. We are all individual actors and the combined business of our individual efforts and choices are what makes an economy.

If there was anyone who needs to be responsible for an economy going wrong, it is those who fix the books at the macro level, i.e., .gov & central banks. They manipulate and distort and "protect", which invariably only creates a worse situation. They are not experts at business, and they are not even experts at anything other than virtue signalling and propaganda and spin. What has that got to do with a productive economy?

What we are going through is the result of economic abuse. We are chastised and handicapped for making "too much" money, we are harassed by an incompetent HMRC, and then we are told we have to work harder and be more austere to "help the common good". All the while the strings are being pulled way above where we can reach and well before we even see it coming. We are always playing catch-up to the scams and lies and BS. They effectively have a tyrannical incompetent ruling over us and then say we are the problem. Do you now see that this is the absolute definition of abuse?

Don't fall into the "altruistic trap" of thinking that we are all to blame, this situation is well beyond our responsibility and control. We are the ones who create an economy, we tread the mill and risk the capital and manage the projects. We know what decisions should or should not be made in our field, and if we fail, then we take the individual hit. .gov has not shown us any sympathy, they only crack the whip harder. Again, the picture of abuse.

Prepare yourselves for much harder times, buy gold, silver and Bitcoin. For the latter, a good resource is http://www.bitcoin.com. Best wishes.

david porter

13:28 PM, 16th July 2020
About 9 months ago

Gordon Brown when in power reduced cgt to 10% and collected an enormous amount of money. Cameron came to power and increased CGT back to what it had been and collected far far less pound coins.
If they increase CGT levels we will simply not sell and crystalise a taxable event. The current Chancellor can put CGT up to whatever he likes. I will decide if I make a sale or not. Let him choose? Some people have debts on their property plus potetial CGT liabilities which are greater than the amount which can be acheived on sale. So put CGT up and see how much tax you collect?

Beaver

14:54 PM, 16th July 2020
About 9 months ago

Reply to the comment left by david porter at 16/07/2020 - 13:28
I think by that you mean that Gordon Brown introduced entrepreneur's relief (at 10%). But entrepreneur's relief was designed to replace the previous CGT taper relief system; Gordon Brown introduced one thing to replace something else. The idea of entrepreneurs relief is that if you are a small business owner you often can't afford to pay into a pension, or pay much into one; you are relying on the ultimate sale of your business for your pension.

Entrepreneur's relief has already been attacked once in the last year. If somebody attacks it again they'll be attacking the sector (SMEs) that produced most of the new jobs after the last financial crisis.

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