Thursday, May 27, 2010
To be or not to be.....that is the cliche
The Times: Scramble to escape capital gains tax
Anxious investors are preparing to offload second homes and shares in an attempt to avoid a government tax raid that is causing growing fury among Conservative ranks...........
Maybe the CGT is a red herring for a HPC...The Conservatives have much to lose by including second homes in the new 40%-50% increases in the tax.
Wadsworth the phrase Home Ownerism springs to mind.
Posted by titaniccaptain @ 01:02 AM (3061 views) Add Comment
43 Comments
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1. titaniccaptain said...
Yes yes bad show putting first comment on your posting but i don't give a stuff.
I left this out.
http://news.bbc.co.uk/1/hi/uk_politics/8705913.stm
It looks like Redwood wants some kind of tapering tax relief for CGT decreasing the liability for anyone who has held their assets over a given period.
In other words they want to adjust the rules to suit themselves.
Pathetic.
2. titaniccaptain said...
Yes yes bad show putting first comment on your posting but i don't give a stuff.
I left this out.
http://news.bbc.co.uk/1/hi/uk_politics/8705913.stm
It looks like Redwood wants some kind of tapering tax relief for CGT decreasing the liability for anyone who has held their assets over a given period.
In other words they want to adjust the rules to suit themselves.
Pathetic.
3. titaniccaptain said...
B*gger!
These reCaptcha are cr@p.
4. uncle tom said...
Among MPs from all parties there are a high proportion of second home owners, whereas only around 1% of the population as a whole fall into this category.
Talk of 'grass roots revolt' among Tory activists is just a ruse to justify a defense of MPs' own interests.
The Dave 'n' Nick show needs to face this one down..
5. dbc reed said...
The Coalition is being stretched to bursting point already .There is no place in it both for Homeownerist Tory backbench diehards who are campaigning to allow their voters to continue to enjoy unearned capital gains in second homes (under threat) and Lib Dems in the Cabinet who oppose House Price Inflation and favour Mansion taxes and even LVT !
Cameron is a supercilious Tory Toff but the Times story says that he is negotiating with the Tory Homeownerist Tax rebels which must go against the High Tory grain so the situation is finely balanced.
6. timmy t said...
"Senior Tories predict that there will be problems for Mr Osborne with his party if the level is set above 25 per cent."
Bearing in mind how often we've heard that the coalition will do whatever is in the best interests of the country rather than any political party, this is surely irrelevant.
7. This comment has been removed as it was found to be in breach of our Blog Policies.
8. the number cruncher said...
I was listening to Davis on the Today Programme just now: he was 'marvellous' - "defending the hard-working people, who where going to be deprived of the fruits of their labours by this unfair tax.."
This is a concerted effort by the right of the Tory party and one that could be the defining issue of the coalition. If taper relief does appear we know we will have business as usual and our tax system will continue to favour the rent seekers.
9. righttoleech said...
It should be as it was before taper relief........paid on gains over and above RPI indexation at marginal income tax rates. Anyone who has beaten inflation as well as receiving rent has done very well. The 18% rate was lunacy and should be seen for what it was, the aberration of a madman. The parasitical BTL behaviour needs taming.
10. flashman said...
"Cameron is a supercilious Tory Toff"
Maybe you are right but I have a different opinion. The quiet dignity and strength he showed when his child died (I would have crumpled) and the very real affection he lavishes on his wife, suggests to me that he is rather special. He has also immediately set about his core support by suggesting higher taxes on those earning over £45K and also of course with the coming increases in CGT. This suggests to me that he is putting the country above party politics, which is something we are not used to. I didn't actually vote for him but I might next time. I wonder how many other people would switch if there was an election tomorrow. Quite a few is my bet
11. Stu531 said...
You may be right about Cameron as an individual, but wait until the Tories have been in for some time. I know folk whinge about Brown's mistakes - which he has made - but the Tories won't do those waiting to get back on the housing ladder, any favours. Redwood has shown the Tories true blue colour - retain the wealth for the richest.
I suggest that what will happen is that, for those that lose their second houses due to being reluctant landlords, they'll lose them - but to those who have large portfolios. In other words, wealth will transfer from the fortunate middle classes to the proper businesses.
12. braindeed said...
This will be a defining moment, the coalition can't talk of 'good of the country' and then support the über free-marketeers who see housing as a commodity that can be exploited regardless of the social consequences - at the same time as millions face austerity at best, and sheer misery and hunger at worst. I knew Redwood was a crank, but the comments of Davis did surprise me.
13. Gmag said...
So having got us to pay their mortgages, furnish and improve their second homes at our expense over the last few years, the MP's still want to have their cake and eat it! I agree with above comments - if you have beaten inflation and made a stonking profit for next to no work owning a second or third home, you should be prepared to pay more tax and certainly a lot more than someone who has made their money through productive labour and hard graft.
I would hardly call myself a socialist but this country is not going to get better for all unless we can re-energise the housing market with affordable stock.
14. doomwatch said...
TC, CGT rules around property is VERY grey the more you go into the "detail". Taper relief does make sense in some cases. e.g. people who own furnished holidays lets recently lost
entrepreneurs relief (CGT at 10% on disposal, as opposed is flat 18%), as furnished holiday lets
were re-classified as "non-business" by HMRC, which to me is utter rubbish and a cynical attempt
by HMRC to capture more double taxation.
In effect, HMRC are punishing people who have provided a genuine long term service by taxing them at the same rate
as the BTL and MP scu m who know how to play the game and flip away CGT.
15. str 2007 said...
Flashman
I didn't vote for Cameron either but am pleased with the overall outcome.
Nice to see you notice the subtleties of the man.
Recaptcha : Bank's trickery
16. nomad said...
"Tory activists" have been tossed the bone of Equitable Life compensation - an attempt to buy them off maybe?
17. mark wadsworth said...
TC, ta for name-check. I second what DBC says.
The MPs who are second home owners are the vanguard of Home-Owner-Ism - if you work in tax and read sections 222 to 224 of the Taxation of Chargeable Gains Act forwards and backwards, you will notice that all the exemptions for second homes are perfectly tailored for MPs who are second home owners ("Permitted periods of absence because of employment elsewhere" and so on). And when they get voted out, they take a cushy job as "advisor" to an investment bank.
So why wouldn't they jump at Redwood's suggestion? Conversely, Redwood's suggestion that capital gains on shares and business assets (excl. land and buildings) be set at 10% or even 0% is eminently sensible and has always been in the MW manifesto.
18. flashman said...
braindeed: I don't think that "uber free marketeers" is an appropriate description for people who "see housing as a commodity". I doubt most of them would know what it meant. Most of them are semi-educated middle class folk who think it is fun to lay out a new kitchen and knock through a wall. The 18% CGT rate helped these people to indulge in their house hobby, which in turn put upward pressure on house prices. There was no ethos or uber free market concept behind it.
Now that this crazy tax rate is about to be scrapped, many of them will move back to less socially damaging pass times. Some of them might even look for a job. CGT returning to sane levels can only be applauded as a step in the right direction.
19. happy mondays said...
This will not bring the prices down, but hopefully it will add pressure for a downward spiral..
Recaptcha : Bankers suck
20. Hungryhippo said...
Cameron was on the Today programme and very definitely did not reassure Tory second homeowners with his 'you'll just have to wait and see' comments.
Fixed term parliaments have made it in their interests to get all the unpopular stuff over and done with now, and then win them all back in 4.5 years time once the deficit is dented. Even Tory backbenchers have to know which side their bread is buttered and will swallow this rather than another quick election forced by voting down the budget.
21. nomad said...
"Recaptcha : Bankers suck"
You made that up!
22. rumble said...
"the coalition can't talk of 'good of the country' and then support the über free-marketeers who see housing as a commodity that can be exploited regardless of the social consequences"
-- I believe the über free-marketeers are opposed to fiat and central banking, which means there are no such people in this environment. I think you might be referring to bankers. Their business is to induce debt in society.
"ishmael government"
23. braindeed said...
...
16. flashman said...
eteers
braindeed: I don't think that "uber free marketeers" is an appropriate description for people who "see housing as a commodity". I doubt most of them would know what it meant. Most of them are semi-educated middle class folk who think it is fun to lay out a new kitchen and knock through a wall. The 18% CGT rate helped these people to indulge in their house hobby, which in turn put upward pressure on house prices. There was no ethos or uber free market concept behind it.
Point taken.
I suppose you can be dim and an über, though.
24. Krustyatemyhamster said...
It's easy to see why the centre-right might like Cameron in the same way that the centre-left liked Blair for taking on the loonies in their parties. Like Blair though, I suspect it is more about quashing likely sources of dissent from within his own party and tailoring the marketing appeal of the party. I rather suspect that Cameron is as hollow and meaningless as Blair.
25. mark said...
recaptcha
crash cometh
26. happy mondays said...
@ nomad, possibly ? But that seems to be the norm nowadays..Let's just make it up as we go along.
This one i did not, but it fits well..
Recaptcha : muppet employee
27. luckyjim said...
I've never really understood why property developers are so disliked on here. Surely renovating making undesirable or uninhabited properties is a good thing. Something that the tax system should encourage. Of course many of them have made money out of pure luck rather than effort but it would be very difficult to only tax the 'luck' element.
28. luckyjim said...
should read - "Surely renovating undesirable or uninhabited properties is a good thing ?"
29. phdinbubbles said...
LJ
Was the current 18% CGT brought in to encourage renovation of properties or to prop up prices? Surely if a government wanted to hit the owners of the 800-1000k empty houses in the UK then the way to do it might be to do something like withdrawing the 6 month council tax exemption on empty properties? And besides, with all the incentives given to BTLers and the huge take up of BTL in recent years then why are there so many empty houses?
30. mark wadsworth said...
PhD, if I may answer your question, the 18% CGT rate was announced six or seven months in advance (in late 2007) in order to try and stave off the house price crash a bit.
The CGT rate does not affect proper developers who buy houses, do them up and sell them. These profits are taxed as normal trading or self-employment income.
There are so many empty and under-occupied houses because "prices can only go up". If you don't have a mortgage or anything, doing them up and getting tenants in was barely worth the hassle over the last ten years. The extreme case is Battersea Power Station which was bought for £80 million and sold for £400 million a decade or two later without the owner doing a thing.
Now, the sensible policy would be to tax vacant homes or sites at higher rates than occupied ones (or have LVT on all land, occupied or not), but no, this is not how politicians think. Most of the parties have proposed grants to owners of vacant or derelict properties to enable them to do them up, in other words, exactly the opposite of LVT.
If you own a vacant or derelict house, this is still a tough call. This year they are offering £30,000 grants - but maybe if you hang on another year, the selling price will have gone up £10,000 or £20,000 and the grant might be increased to £40,000?
31. str 2007 said...
Re: the empty properties, I'm all for property developers doing things up and building new houses.
What I struggle with is the total lack of plots of land available with planning permission.
Building a house or doing one up pumps REAL money into the local economy but plots barely exist and houses to do up have asking prices that would be in-line with the work already having been done.
32. icarus said...
Redwood chairs an enquiry into economic competitiveness yet he wants the burden of tax to remain on work and enterprise rather than on asset price inflation.
33. titaniccaptain said...
Hmmmmm just woken up with a hangover to be presented with last nights spare ribs which had less meat on than Karen Carpenter.
Vince Cable has just come out and said that the capital gains tax rise is a key part of the coalition pact so I guess there will probably be little room to maneuver when it comes to appeasing the Tory old guard with 300 houses each.
Bloomin eck this actually might go through.......didn't think it would last night.
Flashman you have said the unspeakable truth that cuts to the quick.......... "The quiet dignity and strength he showed when his child died (I would have crumpled) and the very real affection he lavishes on his wife, suggests to me that he is rather special.".......
.........Bravo..... It reminds me of the reason I knew my wife was 'The One'.....on the way back to Wales from Bowness where my wife lived I had a long drive home and to my left I noticed a sandwich box filled with stuffed Pitta breads and goodies she had made for me for said journey.
That was it......and to this day she continues to do the most amazing things.
What I am getting at here is just as STR2007 and pointed out in reference to Flashman's comment there are subtleties here that scream at you about Cameron and I personally have had my head so far up my own backside that I have missed them.
Maybe there is hope and we may thank God that this man is in power one day...............or maybe he is the Devil's agent placed here to lull us all into a false sense of security.
Ah that's better my Christian end time conspiracy gene just got re-activated by a rather glutenous sweet and sour sauce from last night.
Good ho.......lovely weather.....but I see storm clouds on the horizon and vultures eating the flesh from the living.....amazing what mono-sodium glutamate can do to you in the mornings when de-hydrated.
But on a serious note (as serious as I can be with a brain rewired by alcohol) maybe we should give this coalition a chance......I quite like the 'Men' at the helm of this country.....lets see if they really do put country before party politics.
34. Capitalist said...
This is my first post here, although I've been reading for some time.
I had thought that most of the posters here were free-market supporters who were angry, as I am, that governments and central bankers have created a housing bubble by inflating the fiat currency they impose on us and holding down interest rates.
The solution to one set of incursions on our freedom is not to introduce new incursions. Raising capital gains taxes is bad, just as raising any tax is bad, and I do not take any joy at seeing the plight of new victims of government theft just because I am not one of them (this time around).
What I would like to see is the reversal of the low interest rate price-fixing by the central banks, because this is another form of theft in favour of government and other borrowers, and against me personally, as it happens.
Taxes should not be used as price-fixing tools or to discourage this or that behaviour. Government shouldn't be involved in price-fixing at all is the point.
35. rumble said...
They are showing signs of common sense. Partly just a case of age. Pretty much anyone over the age of 40 can be written off as a fuddy duddy of a bygone era. Cameron chatting with Taleb is a clue to the future. Generations raised in a different environment develop a different perspective, which results in a different understanding, attitude and philosophy, which is starting to get implemented. The networked world is that new environment. The landscape is about to change massively. I don't know about mayans, end times, soylent green scenarios etc, but the enlightenment part 2 is upon us, and the next 50 years are hold on to your hat times. The new gov or the inevitable?
"new lifetime"
36. flashman said...
Taleb is 50 and Cameron is 43
37. rumble said...
"Pretty much" - keep up fuddy duddy.
"marijuna coconuts"
38. bellwether said...
No idea what DC is like, but strugggle to get past the wet faced androgyny and slight hint of breast.
39. clockslinger said...
Flashman @ 7, given the goodwill and authority commanded by DC you refer to, then now is undoubtedly the time to push through the CGT change unedited, despite little Spotty Osboune and the Murdoch middle class organ doing their best to water any change down. Having allegedly neutered the 1922 committee troublemakers Dave and Nick ought to be able to do the correct thing...or, errr, maybe the feeling in my waters is right and the propoised changes won't go through at anything like the marginal income tax rate. They really are still the party of the rich and Nick will compromise an awful lot not to loose that special feeling of sitting next to some real Eaton blue blood by asserting his party line.
A propos of nothing, has anyone else noticed Spotty can't close his mouth fully when sitting on front bench...a worrying reminder of Gordons odd (latterly cured) opened jawed tic between words. Their policies on (not) tackling HPI may be similar too.
40. braindeed said...
29. titaniccaptain said...
There are subtleties here that scream at you about Cameron and I personally have had my head so far up my own backside that I have missed them.
&
'But on a serious note (as serious as I can be with a brain rewired by alcohol) maybe we should give this coalition a chance......I quite like the 'Men' at the helm of this country.....lets see if they really do put country before party politics'.
These are interesting times. You could argue that his ready compromises indicate a 'One Nation Tory' mentality that was subjugated to the necessity of maintaining his broad church, or perhaps just plain pragmatism......nevertheless; it's been a solidly argued pact so far.
I love the fact that it isolates the rabid right in his party, and has stymied the loony left on the LibDems.
PS Does Mrs. TC still do that lovely poached egg and asparagus hangover cure breakfast?
41. titaniccaptain said...
@Braindeed Mrs TC does indeed do poached eggs it is something which i have been begging her to do for some time and she has experimented with different ways of poaching an egg and after much experimentation she has found the perfect method which involves chucking the contents of the egg into boiling water however she is not a fan of asparagus unless in the the form of a soup.
42. Si said...
I haven't read all of the above but all I can add is that my area is a sea of for sale boards (none for rent) and I'm about to be made homeless because my landlord has decided to join the horde and sell. I'm 32, a doctor, and unable to buy, and I can't describe my feelings for the people who have put me in this situation. They wouldn't make the censor.
43. braindeed said...
TC @41 said....
is not a fan of asparagus unless in the the form of a soup.
My, she's changed - bet she's still the same girl who would do anything for you, though