Nationwide head of specialist lending Andy McQueen has hit out at the Government’s exclusion of buy-to-let investors from capital gains tax entrepreneurs’ relief.
Last week’s Budget confirmed Government’s proposals earlier this year to exclude property letting businesses from entrepreneurs’ relief.
The relief allows people selling their businesses to pay 10 per cent tax on gains up to £1m rather than the new flat rate of 18 per cent.
Previously, a property landlord was liable to pay a 40 per cent CGT rate on a property, tapered down to 24 per cent over a 10-year period.
McQueen says that he cannot understand why the Chancellor has taken the decision that buy-to-let investors should not be classed as entrepreneurs.
He says: “Many buy-to-let investors build up profitable long-term businesses based on strong revenue streams and those who want to sell on these businesses as going concerns should be eligible to take advantage of the 10 per cent tax.
“I am disappointed that the Chancellor missed out on the opportunity in the Budget to correct this earlier attack on landlords.”
In general, McQueen welcomes the changes made to simplify CGT, which he says will benefit BTL investors as they will now only have to pay the 18 per cent flat rate. He says this will offer BTL investors much greater freedom to manage portfolios.
A Treasury spokesman would not comment specifically on why BTL investors have been excluded but says: “These reforms will deliver a more sustainable system that is straightforward for taxpayers. The Government believes this package strikes the right balance between simplicity, fairness and incentives for investment.”