No need to panic on possible CGT move

14 June 2010

With the emergency Budget on the horizon there’s a lot of speculation about measures that will be introduced when chancellor George Osborne steps up to the despatch box on June 22.

Of particular interest to the buy-to-let sector is the decision that will be made on Capital Gains Tax and the effect this could have on landlords’ investment decisions.

What surprises me is the steadfast opinions of some in the market who are predicting a collapse of buy-to-let or imploring investors to sell their properties immediately, all this having been decided in advance of any actual announcement.

Those suggesting landlords should sell up immediately are pre-empting any decision. And if the government decides to raise CGT it could backdate this to the start of this tax year, which would see all selling landlords caught by the hike anyway.

It does not make business sense to have an investment strategy based on a decision which has not been taken, especially as it’s likely to be quite different from what was anticipated just weeks ago.

At the time of writing Tory backbenchers are bringing their political muscle to bear on the government which is likely to mean a significant shift on this issue.

I understand the potential implications if CGT is hiked but I’d prefer to see the policy in full before making any decisions. And I’d advise others in a similar position to do the same.

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