Entrepreneur Relief: Buy_to_Let Excluded

Entrepreneur Relief: Buy-to-Let Excluded

Andy McQueen, head of specialist lending at Nationwide has hit out at the Government’s exclusion of buy-to-let investors from capital gains tax entrepreneur relief.  The recent Budget confirmed Government’s earlier proposals to exclude property-letting businesses from entrepreneur relief.  This relief allows people selling their businesses to pay 10 per cent tax on gain up to £1m rather than the new flat rate of 18 per cent.

Previously a property landlord was liable to pay 40 per cent capital gains tax rate on a property, tapered down to 24 per cent over a 10-year period.  McQueen said he welcomed the changes made to simplify capital gains tax, which will benefit buy-to-let investors as they will now only have to pay the 18 per cent flat rate.  But he cannot understand why the Chancellor has taken the decision that buy-to-let investors should not be classed as entrepreneurs.

Our view

Well you would expect the “employed” head of Nationwide’s specialist lending arm for ‘buy to let’ mortgages to say that wouldn’t you?

The fact remains that entrepreneur’s relief is in fact an encouragement for people to start business and create successful employment.  Buy-to-let is not being an entrepreneur.  It is personal profit making, it is not being a corporate wealth builder or taking an entrepreneur role to create employment.

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