A CGT increase would freeze the PRS

Yep you are right I have received Entrepreneurs releif and very pleased to have it. I guess what I am saying is that I know what I Tax I have to pay (and planned for an increase) on my Propities when I sell and of course I will try to minimise all I can but when that time comes but I will step up to the mark and providing my planning was good to start with there will still be enough over for a good meal out. At the moment I am quite happy to sit with my 6% return far better than 0.1% from the Bank.

Yes Beaver, low hanging fruit. It is a disgrace.

Reply to the comment left by Tony Southwold at 10/02/2021 - 14:59
So if you received entrepreneurs' relief you paid 10% tax on up to £10 million previously (now £1 million) for the effort and risk you went to as an entrepreneur. Because small business owners and entrepreneurs do take risk...that's why it's there.

In the wake of the last financial crisis the growth in employment came from the small business sector. If you run a small business often you can't afford to pay enough into a pension when you are running it so you rely on ER on the final sale of your business to be able to retire.

Often a BTL won't pay much in income: You are relying on being able to release the equity to retire on. Being a BTL landlord isn't a free ride...tenants don't respect your property...governments don't make the tenants pay the rent...the converse is true.

But now if you're a little guy somebody is about to tread on you for all that effort.

If you have invested in more than one property and built a small portfolio up over the years then it represents a lot of work which as we age is not always welcome or entirely sensible to assume that it would be possible I don't think. I manage my properties myself, and yes you could put it to an agent but I have found, from experience, that this is not always the best way to do things. My plan has always been to reduce the portfolio to say two properties mortgage free next stage, one of them is next door to me, but to do this I would need to sell some to pay off the finance on the others and this would incur the CGT charges so that is why it doesn't work in a situation such as mine. I am going to look into the company route but I dont see why we cant reduce the number of properties by re-investing into the others and thereby accommodating a plan like this. It makes sense and the point of it is to streamline and improve on the way income is earned. I dont think I can be alone in the way I have approached things. Property growth is the speculation bit and may or may not pay dividends but income is the main aim for some of us and some flexibility to organise that would be very welcome. Why should you have to hold all the properties because it is simply uneconomic to sell some of them when you could make a plan to reduce the size of the portfolio by selling and re-investing. There is also the forthcoming concern about how much further investment would be required to bring an older property up to whatever standard to meet the legal requirements for energy efficiency in the not too distant future and with the apparent lack of understanding for private landlords I am not exactly holding my breath that much assistance will be forthcoming.

timed out on editing there. I need to crystallise some CGT losses, to offset any future sales with potential gains. Will the government abolish such carry forward losses in the future? I do not know, but must act in the hope that they will not. The hold up is litigious and therefore outside of my control. The government will not factor any such considerations in to what ever they decree. They have by stealth all but extinguished my carry forward I.T. losses over the last 4 years which amounts to robbery. On the plus side that has buffered my Property Finance Charges Relief which has not been claimed (yet) but I predict a cliff edge coming soon. Four years was not long enough for me to move the tanker back on course. Was I derailed by government? Probably - yes. It is a disgrace.

Reply to the comment left by CazT at 10/02/2021 - 13:00
Yes, its made me realise you can't plan for your retirement, as the govt are always changes the rules.

Reply to the comment left by John at 10/02/2021 - 11:09
Democracy is 3 wolves and a sheep deciding who to eat for lunch. Guess who the sheep is in this case.

The problem with capital gains tax is it makes no sense.
Yes, you may have made money in terms of pounds, but you have not made anything in terms of houses. If you sold a house and tried to buy a like for like house, say your neighbours, you can't do it with capital gains tax. You sell your house, pay your capital gains tax, and you can't buy your neighbours house of the exact same quality or location. How have you made income when you are no better off?

One of the arguments for taxing capital gain, is that it is income like any other. But its not really. You can think of PAYE wages as equivalent to the monthly rental, and the increased value of your skills as capital increases(or increase of asset value - you being the asset).
When you work PAYE you pay as you earn. While you are in employment, you pick up skills and can demand a higher salary for you next job. But when you change jobs you are not all of a sudden charged an extra tax on the increased value of your labour over that employment.

We also won't get into how unfair it is to tax inflation?

(You don't have stamp duty, capital gains tax or inheritance tax in NZ - a these are seen as inherently unfair, and they are.)

Reply to the comment left by Tony Southwold at 10/02/2021 - 14:39
What happens when interest rates go back up and property values fall.
We cannot assume they will stay low forever. Do you think the govt will hand back all these taxes when property values fall?

Reply to the comment left by TheBiggerPicture at 10/02/2021 - 17:26
Yes, how can it be fair to tax inflation. How can they explain this I wonder. Its grossly unfair and needs to be addressed urgently. I thought that was what was to be amended but according to the original post it does not seem to be on the agenda now. Simplify Capital Gains Tax but in whose favour ? How ever they want to look at raising revenue out of property it it not justifiable not to allow for inflation. No-one minds paying a fair amount but this tax is crippling and unworkable with if you invest in property to earn income, not just because of the method of calculation but also the proposed rates.