Assetz® News » HOME | RSS Feed FEED | LIST ALL ARTICLES | ASSETZ HOMEPAGE
Investment Property News from Assetz

Assetz® Property News Service

Pre budget report offers interesting changes in capital gains tax

16th October 2007 | back to article listings BACK    print this article PRINT

Interesting comments today regarding capital gains tax.
See the full Pre-Budget Report here : news.bbc.co.uk/1/shared/bsp/hi/pdfs/09_10_07_pbr_report.pdf

Firstly I understand that in April it is proposed all capital gains tax switches to a fixed rate of 18% - this would eliminate business asset taper relief that reduces private shareholding tax to 10% currently after two years holding of the asset such as private company shares, AIM shares etc.

On the other hand I guess it reduces the tax payable in the UK on overseas property gains. For example in some countries you pay next to no capital gains tax at all after a few years ownership but because it's an overseas asset there is no relief in the UK at all and you would still pay a full 40% (or the balance remaining of 40% after deducting the overseas tax) on the gain pretty much even after holding for 10 years whereas under the new regime this would be reduced to an 18% tax rate immediately and if say 16% had been paid in say France already, just another 2% would be due here rather than a further 24%.

Business rollover relief is still available so that for example if you sold a business asset like company shares or a rented out holiday home currently you would currently pay 10% after two years of ownership but if you rolled the profits into another private business or property based trading business such as holiday lets you in fact pay no tax at all currently if you reinvested the proceeds one year before the sale or two years after. After April there is no apparent risk to business rollover relief and for example the owner of a business involved in holiday lets can still pay 0% capital gains tax if they roll the proceeds into another business asset or holiday let property.

Finally it sounds like residential property capital gains tax on second homes and buy to let has been slashed from 40% to 18%. The taper relief currently available on residential investments after 10 years takes a 40% taxpayer down to 24% tax rate on the capital gain - but in April this is cut further , even after just one months ownership to just 18% it would appear.

I'll let you know shortly confirmation on these points.

Stuart Law

This news story has come from the property investment blog by Stuart Law, CEO Assetz plc.

Assetz® is a UK and International Property Investment Specialist. Please visit our property sites shown below.

Assetz for Investors UK Assetz Hotels Assetz Homes Assetz International Assetz France Assetz Spain Assetz Cyprus Assetz Germany Assetz Portugal Assetz Ski Assetz Cape Verde Assetz USA Assetz Finance Assetz Fund Management

Accessing the news service

You can view all of the Assetz® UK, International and UK Property Investment Articles and News here.

We also provide an RSS Feed Feed of the news service, or you can view all articles. Click here to view more information on RSS readers and how they make reading online news more convenient.

eXTReMe Tracker