Autumn Statement 2015

[JagLover]

poocherama said:

Of course the value of investments fluctuate over time. Its why Warren Buffet is one of the richest men on the planet.

Though as per my previous post I'd be interested in how you'd encourage private individuals, with little or no experience of investing in businesses, to park their money into 'productive' areas of the economy.

Usually collectively either via pensions, investment funds or just holding money in a bank account that is then lent to business.

The internet has opened up new avenues for "productive" investment such as crowdfunding.

What isn't productive investment is putting everything in a rental property and relying on capital appreciation for that to be your pension in twenty year's time.

[JagLover]

Bluebarge said:

All investment is speculation.

No speculation = no economic activity.

If we want people to invest in other sectors, we need incentives. Slapping extra tax on any investment that starts to look successful is not an incentive to any investment.

That does ignore all the ways that BTL investors have benefited from government intervention whether that be via artificially low interest rates, funding for lending initially being available for mortgages and planning constraints creating artificial supply.

Moreover this sector has historically benefited from tax rules predominantly by gaming the private residence relief on capital gains on sale.

All investment is speculation but not all investment results in productive activity. It seems entirely logical and right that BTL investment should face a more onerous tax regime than investing in a business that will help the economy grow.

[Eric Mc]

Bluebarge said:

All investment is speculation.

No speculation = no economic activity.

If we want people to invest in other sectors, we need incentives. Slapping extra tax on any investment that starts to look successful is not an incentive to any investment.

Perhaps in very broad terms. But some speculation is more "speculative" than others.

Buying assets and sitting back watching the money roll in or waiting for its value to increase is to me, pure, non-productive speculation of the worst kind. It stifles TRUE innovation and productivity.

[Elroy Blue]

Rovinghawk said:

Weasel words- this wasn't cutting financial relief in any way, shape or form. It was imposition of additional taxes.

Rovinghawk said:

The money has to come from somewhere, ie taxpayers. If it isn't in this form then it'll be in another.

You seem to be having difficulty making up your mind. You've spent previous years telling all of us raising the damage done by savage Police cuts that 'there's no money left' and it has to come from somewhere and we should stop moaning. Now your precious Government has cost you a few pennies, it's all so scandalous.

Rovinghawk said:

Landlords are all scummy millionaires leeching off 'hard-working families' so it's fair enough to penalise them.

.

As someone who castigates and insults every member of the Police for the actions of a few, the hypocrisy is strong in this one.

[poocherama]

JagLover said:

poocherama said:

Of course the value of investments fluctuate over time. Its why Warren Buffet is one of the richest men on the planet.

Though as per my previous post I'd be interested in how you'd encourage private individuals, with little or no experience of investing in businesses, to park their money into 'productive' areas of the economy.

Usually collectively either via pensions, investment funds or just holding money in a bank account that is then lent to business.

The internet has opened up new avenues for "productive" investment such as crowdfunding.

What isn't productive investment is putting everything in a rental property and relying on capital appreciation for that to be your pension in twenty year's time.

Interest rates have been unchanged for half a decade and look like staying where they are for the forceable future. A vast army of people in the private sector have seen their pensions dismantled by the shortsighted policy of successive governments.

Property is easy to understand and the risks reasonably easy to model, but you're honestly suggesting that the average person with £50k to invest should look at crowd funding? A nascent industry with the lightest oversight from the FCA with virtually no exits to speak off.

[poocherama]

Eric Mc said:

Bluebarge said:

All investment is speculation.

No speculation = no economic activity.

If we want people to invest in other sectors, we need incentives. Slapping extra tax on any investment that starts to look successful is not an incentive to any investment.

Perhaps in very broad terms. But some speculation is more "speculative" than others.

Buying assets and sitting back watching the money roll in or waiting for its value to increase is to me, pure, non-productive speculation of the worst kind. It stifles TRUE innovation and productivity.

What? When I invest in debt/equity I expect exactly that. To sit back, watch the money roll in and see the asset increase in value. I do nothing other than provide capital to that enterprise. You could almost call it rent seeking, me the owner of capital, growing fat off the labours of the working man.

[Bluebarge]

Eric Mc said:

Buying assets and sitting back watching the money roll in or waiting for its value to increase is to me, pure, non-productive speculation of the worst kind. It stifles TRUE innovation and productivity.

But that's what you do when you invest in a pension, ISA, become a business angel or whatever. You are making your capital available for someone else to use. Nothing wrong with that - it's been the basis of the banking system ever since it began in the 1200s.

And a BTL landlord is simply providing a service (rental housing) - it's no different to someone letting commercial property, or cars, or office equipment - it's providing the use of an asset to someone who hasn't the means to purchase it.

The rental sector is much bigger in most European countries; it's only in the UK that we have this obsession with taking on huge sums of debt to rent a home from a bank.

It's very odd; I usually get accused of being a leftie on NP&E but there are some very anti-capitalist ideas being proposed on this thread by people who are normally solidly right-wing, and George Osborne has produced quite a Socialist budget - the World shifts on its axis.

[Justayellowbadge]

I've just been reminded that stamp duty is a legitimate purchase cost, so you can offset it against CGT when you sell. Relatively little impact for serial flippers.

[Eric Mc]

Bluebarge said:

But that's what you do when you invest in a pension, ISA, become a business angel or whatever. You are making your capital available for someone else to use. Nothing wrong with that - it's been the basis of the banking system ever since it began in the 1200s.

And a BTL landlord is simply providing a service (rental housing) - it's no different to someone letting commercial property, or cars, or office equipment - it's providing the use of an asset to someone who hasn't the means to purchase it.

The rental sector is much bigger in most European countries; it's only in the UK that we have this obsession with taking on huge sums of debt to rent a home from a bank.

Not arguing about any of that. But don't forget where a huge portion of the financial institutions that run our pensions have been putting your pension money. Yes - you've guessed it - property.

The rental sector in Europe is run and managed in a very, very different way to the rather "free for all" small time investors we have here. It is a much more stable and regulated activity and wholly incomparable with what happens in the UK.

[JagLover]

Bluebarge said:

The rental sector is much bigger in most European countries; it's only in the UK that we have this obsession with taking on huge sums of debt to rent a home from a bank.

France has now overtaken us in the proportion of owner occupiers.

The UK now has very poor pension provision for virtually all (outside the public sector) so relies on the vast majority of households being mortgage free owner occupiers by retirement.

[Bluebarge]

JagLover said:

The UK now has very poor pension provision for virtually all (outside the public sector) so relies on the vast majority of households being mortgage free owner occupiers by retirement.

Agree with the first bit but not the second (unless you are referring to care home fees) most people will end up asset-rich but cash poor if they follow that route to provide for their retirement - very few elderly people can bring themselves to downsize from the family home their kids grew up in.

Any road, to my mind the issue is not BTL, it is lack of housing supply and lack of sensible pension investment routes that are (a) secure (Equitable Life scared a lot of people) and (b) free from silly regulation (annuity rules) and tax raids. Think it will need some far-sighted Chancellor to sort that out - I think this one is too focussed on preparing the ground for moving next door.

[sugerbear]

poocherama said:

JagLover said:

poocherama said:

Of course the value of investments fluctuate over time. Its why Warren Buffet is one of the richest men on the planet.

Though as per my previous post I'd be interested in how you'd encourage private individuals, with little or no experience of investing in businesses, to park their money into 'productive' areas of the economy.

Usually collectively either via pensions, investment funds or just holding money in a bank account that is then lent to business.

The internet has opened up new avenues for "productive" investment such as crowdfunding.

What isn't productive investment is putting everything in a rental property and relying on capital appreciation for that to be your pension in twenty year's time.

Interest rates have been unchanged for half a decade and look like staying where they are for the forceable future. A vast army of people in the private sector have seen their pensions dismantled by the shortsighted policy of successive governments.

Property is easy to understand and the risks reasonably easy to model, but you're honestly suggesting that the average person with £50k to invest should look at crowd funding? A nascent industry with the lightest oversight from the FCA with virtually no exits to speak off.

I have a private pension (two in fact) and have done very well out of them. The government hasn't dismantled them, they still provide an excellent way to say for your future tax free. Bunging your taxed money into property and then speculating that interest rates will remain the same and that the planning and tax system wont change seems like an investment just as risky as investing in shares.

[RYH64E]

jonah35 said:

The new stamp duty tax is great news for landlords.

Not so grweat when they come to spend some of their profits on a nice, big house for themselves to live in.

As I understand it, and I hope I'm wrong, any new house that I buy, whether for letting out, living in, or for my kids to use while at University (which was the plan), will attract punitive stamp duty rates.

[London424]

RYH64E said:

jonah35 said:

The new stamp duty tax is great news for landlords.

Not so grweat when they come to spend some of their profits on a nice, big house for themselves to live in.

As I understand it, and I hope I'm wrong, any new house that I buy, whether for letting out, living in, or for my kids to use while at University (which was the plan), will attract punitive stamp duty rates.

I'm guessing it'll just be an exercise in being creative.

[Justayellowbadge]

RYH64E said:

jonah35 said:

The new stamp duty tax is great news for landlords.

Not so grweat when they come to spend some of their profits on a nice, big house for themselves to live in.

As I understand it, and I hope I'm wrong, any new house that I buy, whether for letting out, living in, or for my kids to use while at University (which was the plan), will attract punitive stamp duty rates.

I can only assume there will be some sort or PPR exemption.

It would otherwise be absurdly punitive for someone with one 200k flat they let, moving from a 3mil to 3.5mil family home, say.

[Welshbeef]

Justayellowbadge said:

I can only assume there will be some sort or PPR exemption.

It would otherwise be absurdly punitive for someone with one 200k flat they let, moving from a 3mil to 3.5mil family home, say.

But the book is out already and so far no one here or elsewhere has picked up on exceptions of PPR if so its a fker for sure.

[Rovinghawk]

Elroy Blue said:

Rovinghawk said:

Weasel words- this wasn't cutting financial relief in any way, shape or form. It was imposition of additional taxes.

Rovinghawk said:

The money has to come from somewhere, ie taxpayers. If it isn't in this form then it'll be in another.

You seem to be having difficulty making up your mind.

No problem at all- the statement from Derek was a misrepresentation of the facts. A lie, if you prefer.
Your statement was bks whereby you complain that something requiring payment actually required people to pay something.
I find all of that consistent.

Rovinghawk said:

Landlords are all scummy millionaires leeching off 'hard-working families' so it's fair enough to penalise them.

As someone who castigates and insults every member of the Police for the actions of a few, the hypocrisy is strong in this one.

I'm in favour of good policer. I've said many times that I have a problem with the bad police. If you believe that means all of them then the problem would appear to be in your perception of your colleagues.
btw- The anti-landlord comment was tongue-in-cheek. I don't know any bad landlords but I've seen a lot of scummy tenants. I'd add that my current tenants are lovely & we have a pleasant setup.

[Eric Mc]

I doubt very much that any property that is a Main Residence will suffer the extra 3% Stamp Duty.

However, ESTABLISHING what is your Main Residence may be a bit complicated on occasions. We already have rafts of legislation and tax cases over what is or isn't a Main Residence under the Capital Gains Tax rules. I hope to goodness that the new Stamp Duty essentially follows what has been established over decades through CGT. Otherwise it will be a right royal mess.

[Rovinghawk]

Justayellowbadge said:

I've just been reminded that stamp duty is a legitimate purchase cost, so you can offset it against CGT when you sell. Relatively little impact for serial flippers.

On a £100k property SDLT=£3k.

After sale & CGT relief I'd have paid £2160 extra and the serial flippers will pay this cost many times over.

Rather than screwing working people for more tax, how about cutting down freebies for the idle who know how to work the system?

Edited by Rovinghawk on Thursday 26th November 13:49

[loafer123]

Justayellowbadge said:

I've just been reminded that stamp duty is a legitimate purchase cost, so you can offset it against CGT when you sell. Relatively little impact for serial flippers.

Presumably the post-CGT offset cost of the increase is 3% * (100%-28% CGT) = 2.16%