Capital gains from the sale of residential property must be included in the “generous exemptions” if Capital Gains Tax (CGT) is increased, according to the National Landlords Association (NLA).
It says that following the General Election campaign where housing was barely mentioned, the new Government must be focused on encouraging investment in residential property. The new CGT regime will act as a significant disincentive for landlords considering further investment.
A flat rate of 18 per cent on capital gains on non-business assets is set to be replaced by Income Tax bands at 20, 40 and 50 per cent. The new CGT rates are expected to pay for the increase in the Income Tax exemption threshold to £10,000.
The NLA is calling on the Government to include capital gains from the sale of residential property as part of the wide-ranging “generous exemptions” which will also include entrepreneurs and other businesses.
David Salusbury, Chairman, NLA, commenting on the expected CGT increase, said:
“When landlords let property they are running a lettings business. Today, we are calling on the Government to ensure profits from this business activity are included as part of the exemptions.
“We are concerned that a tax increase of this nature will act as a barrier to further investment in residential property just at a time when there is an urgent need for more housing.
“The NLA will be doing everything we can to ensure that landlords’ activity is considered to be business activity for the purposes of CGT. There should be further consultation with the industry before drastic changes are made. The law of unintended consequences should be considered here.”
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