Is it worth it after CGT?
11:21 AM, 29th November 2021, 5 years ago
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It would seem many landlords are selling up, ‘but’ is this where capital gains tax comes in?
As an example:- I have read if a property rises in value to leave £300,000 after taking away purchase price exp’s etc. After the measly £13000, allowance taking into account the capital gains tax thresholds with rates of 20% and 28% respectively the capital gains tax bill would be around £80,000!
Have I got this right?
It would seem the rental income over the years mostly goes to the government by another name!
I believe corporation tax is slightly lower?
Many thanks
Lalo
39 comments on this article
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Member Since April 2019 - Comments: 59
6:47 PM, 4th December 2021, About 5 years ago
Reply to the comment left by Elaine Landlord at 04/12/2021 – 11:06
I’m a BTLer also and have been for 30 years and what enabled me to retire early(although you never retire if you run BTL) but I’m starting to think I should diversify out a bit and enjoy myself. Selling a couple of laggards and pay a little CGT makes sense. Spending it on some fun and investing the rest in a global all shares tracker will give me the same yield. Also, even you have agents you still have to be involved a bit with the hassle (higher figure repairs etc). So much red tape now and pending EPC stuff.Having too much in property is too illiquid.
Member Since January 2011 - Comments: 12255 - Articles: 1477
6:50 PM, 4th December 2021, About 5 years ago
Reply to the comment left by geester24 at 04/12/2021 – 18:47
I am working on an article to share my own thoughts on this. Watch this space.
Member Since January 2020 - Comments: 102
8:08 PM, 4th December 2021, About 5 years ago
Reply to the comment left by Elaine Landlord at 04/12/2021 – 11:06
CGT is avoided by death!
Member Since January 2011 - Comments: 12255 - Articles: 1477
8:33 PM, 4th December 2021, About 5 years ago
Reply to the comment left by Olls63 at 04/12/2021 – 20:08
True but IHT isn’t, that requires planning
Member Since January 2020 - Comments: 102
8:36 PM, 4th December 2021, About 5 years ago
Reply to the comment left by Mark Alexander at 04/12/2021 – 20:33
And usually left too late.
Member Since January 2016 - Comments: 300 - Articles: 1
11:58 AM, 5th December 2021, About 5 years ago
Inheritance tax
If when you die and all your issues are resolved and you leave your children a sterling figure of seven digits each after tax and expenses that is all you need to do.
Leaving an enormous fortune will not do them any good
Member Since August 2015 - Comments: 4
2:31 PM, 6th December 2021, About 5 years ago
have you considered SEIS investments? The tax perk should not be the main reason to invest but potentially this may reduce your CGT?
Member Since March 2018 - Comments: 197
7:05 PM, 16th December 2021, About 5 years ago
Reply to the comment left by Monty Bodkin at 29/11/2021 – 15:23
A 20% tax on any income above £15,000 would generate huge revenues while incentivizing everyone to earn as much as possible. However this policy would cause some people to become unemployed – tax collectors, civil servants, accountants, lawyers, especially – so it will never happen without a revolution. Sadly all their brainpower is dedicated to counting numbers instead of devising the next scientific breakthrough.
Member Since March 2018 - Comments: 197
7:08 PM, 16th December 2021, About 5 years ago
Reply to the comment left by geester24 at 30/11/2021 – 11:35
The politicians would be stupid to make the changes you mention, but stupidity has never stopped them before.