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George Osborne Offers Rebels Concession On Tax

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I love to know how they are going to tell the differance between investerment in engineering or Houses???

Mike

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I love to know how they are going to tell the differance between investerment in engineering or Houses???

Mike

As there are already laws that do this, it can't be hard

timk

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"Field said: “Everyone is realistic — there must be a change to capital gains tax. But there are sound reasons why capital and income are taxed differently. It is a question of finding the right balance.”

I'd love to hear him expand on this.

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If the government can't push through this 40% CGT then what chance is there that they can pass the massive tax increases and spending cuts needed? No 40% should mean bye bye triple A rating.

Keeping the 10k allowance sounds pretty fair, allowing starving pensioners to off-load 10k worth of shares per year will allow them the odd tin of soup and bit of stale bread.

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"Field said: “Everyone is realistic — there must be a change to capital gains tax. But there are sound reasons why capital and income are taxed differently. It is a question of finding the right balance.”

I'd love to hear him expand on this.

Me too.

Until 2008 it was tied to the rate of income tax. The country didnt implode. In fact things were a lot healthier back then than they are now. Even more so before taper relief from 1998.

It still seems they cant see the woods from the trees. That short term speculation shouldnt be rewarded (or encouraged, even if it might boost initial tax revenues) if it destroys long term stability.

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Come off it guys, this debate is going in the right direction.

Yes, GB's 18% flat rate was dumb as it encouraged tax avoidance and we can no longer afford it.

But the LibDems lower threshold and high rate hit those with very modest pension pots.

So we heading towards keeping the 10k threshold, a max rate of 30-40% and taper relief to so that the asset-flippers get hit hardest.

Its a far more rational process than GB's panic flat 18%.

If this arm-wrestle keeps up, we may end up with a sensible solution. On the other hand ,a capitulation to LibDem high tax utopia will cause a degree of capital flight, and if the Tory ultra-right win the coalition may start to creak.

Sadman is right - the pre-2008 regime was pretty sane.

Edited by IBlewItLastTime

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Come off it guys, this debate is going in the right direction.

Yes, GB's 18% flat rate was dumb as it encouraged tax avoidance and we can no longer afford it.

But the LibDems lower threshold and high rate hit those with very modest pension pots.

So we heading towards keeping the 10k threshold, a max rate of 30-40% and taper relief to so that the asset-flippers get hit hardest.

Its a far more rational process than GB's panic flat 18%.

If this arm-wrestle keeps up, we may end up with a sensible solution. On the other hand ,a capitulation to LibDem high tax utopia will cause a degree of capital flight, and if the Tory ultra-right win the coalition may start to creak.

Sadman is right - the pre-2008 regime was pretty sane.

If they don't raise money via CGT then they will use another method. If VAT is raised it will hit the poor with devasting consequences. I think it is only right that those with second homes should be expected to pay up. Had they placed their money in a savings account, they would probably have been taxed on the interest earned.

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If the government can't push through this 40% CGT then what chance is there that they can pass the massive tax increases and spending cuts needed? No 40% should mean bye bye triple A rating.

Keeping the 10k allowance sounds pretty fair, allowing starving pensioners to off-load 10k worth of shares per year will allow them the odd tin of soup and bit of stale bread.

I guarantee you the rise in CGT will result in less money be collected; that has been the story everywhere else it's been done.

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Come off it guys, this debate is going in the right direction.

Yes, GB's 18% flat rate was dumb as it encouraged tax avoidance and we can no longer afford it.

But the LibDems lower threshold and high rate hit those with very modest pension pots.

So we heading towards keeping the 10k threshold, a max rate of 30-40% and taper relief to so that the asset-flippers get hit hardest.

Its a far more rational process than GB's panic flat 18%.

If this arm-wrestle keeps up, we may end up with a sensible solution. On the other hand ,a capitulation to LibDem high tax utopia will cause a degree of capital flight, and if the Tory ultra-right win the coalition may start to creak.

Sadman is right - the pre-2008 regime was pretty sane.

Agreed.

Second homes and investment properties are ripe to be taxed, and have been left off for far too long. However Cable and Huhne's idea to bring shares into this net without any recognition for how long they've been held is madness and Redwood is right on this.

CGT is only one way to skin the Buy To Let cat.

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CGT is only one way to skin the Buy To Let cat.

It is a very blunt and imperfect instrument for dealing with the real estate issue..but it seems to be the only one we will be allowed

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I guarantee you the rise in CGT will result in less money be collected; that has been the story everywhere else it's been done.

I think this is more just a case of cycles and at which points governments raise taxes on investment, they dont do it during the growth periods because the income and corporate taxes along with cap gains are continuously growing, there is no need. Once the downturn hits and govt spending falls due to reduced tax take, they raise them. This coincides with market downturns which naturally have a negative impact on Cap Gains receipts, It is not the raising of the tax that is therefore the reason for decline

Edited by Tamara De Lempicka

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maybe if they reverted to the old CGT tax with all its well thought out variances and found some other way to stop the property speculators or the 'squealing pigs' as they are known. Remove the income tax breaks on rental income for one, tax the profits on a second home sale for another, stop the 'flipping' of properties and reduce the 3 year 'allowed to have two homes if you can't sell the main home' to 6 months or a year.

Something needs to be done to allow people particularly the younger renting generation to buy the house for which they currently pay the landlords mortgage who is now complaining because he is not able to walk away with a huge capital gain.

Of course John Redwood is an idiot and I hope the squealers if they get a concession it is replaced by what they did not wish for. :angry:

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So when Brown dropped it to 18%, the tax receipts rocketed did they?

Unless the UK is a total anomaly then yes I would imagine they increased significantly

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So when Brown dropped it to 18%, the tax receipts rocketed did they?

In the last year of the old regim the 2007/8 out-turn was £5.3 billion.

http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/Budget2009/bud09_chapterc_463.pdf

In the first year of the new regime, the 2009/9 out-turn was £7.8 billion

http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/budget2010_annexc.pdf

So yes, it did seem to rocket

Edit: millions to billions

Edited by IP Newcomer

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In the last year of the old regim the 2007/8 out-turn was £5.3 billion.

http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/Budget2009/bud09_chapterc_463.pdf

In the first year of the new regime, the 2009/9 out-turn was £7.8 billion

http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/budget2010_annexc.pdf

So yes, it did seem to rocket

Edit: millions to billions

Wow, thats an interesting find. But you know what I think was?

Gits like me taking advantage to crystallise share gains at the low rate before the party ended!!!!!

:ph34r:

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"...I am therefore increasing the level of capital gains tax to 25% from 18%."

That's my forecast.

Not too bad as it ups it a bit although a rate of 30% would have been more congenial.

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Wow, thats an interesting find. But you know what I think was?

Gits like me taking advantage to crystallise share gains at the low rate before the party ended!!!!!

:ph34r:

Some of it, yes. But it wasn't the best year for capital gains generally.

I was surprised at how large the effect was, and am very surprised that no ones making use of the figure. Perhaps there's something I'm missing in it?

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In the case of real estate property, it is more than just the issue of a tax take. Absolutely idealy a tax of this nature on real estate would result in a more stable real estate market with fewer gains to tax. and so economic benefits that would have otherwise been swept into the bank accounts of the owners of real estate by rising prices instead remain with producers. This makes for a healthier and more just economy. CGT is very far from ideal for this purpose, but aparently it is all we are allowed.

Edited by Stars

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Some of it, yes. But it wasn't the best year for capital gains generally.

I was surprised at how large the effect was, and am very surprised that no ones making use of the figure. Perhaps there's something I'm missing in it?

Attached links give CGT take plus all other taxes from the dawn of time for the former inland Revenue and the current HMRC

http://www.hmrc.gov.uk/stats/tax_receipts/table1-1.pdf

http://www.hmrc.gov.uk/stats/tax_receipts/table1-2.pdf

To be honest CGT is pretty small beer raising far less than Stamp Duties over the past decade.

One thing worth considering is whether the recent rise in CGT yield is simply business owners income being converted to capital gains

http://www.timesonline.co.uk/tol/money/tax/article6300554.ece

Certainly it is strange that CGT rose in 2008-2009 while income tax yields remained static

Edited by realcrookswearsuits

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I don't want to make all the communists on these threads look like idiots, but are you proposing that we should bring the taxes on someone investing in a profitable company through shares (23% corporation tax plus 18% capital gains tax) more equal to income tax (typically 40%)? They seem pretty close already.

Why not leave capital gains tax alone and make property investors interest payments non-deductable the same as regular people's?

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I guarantee you the rise in CGT will result in less money be collected; that has been the story everywhere else it's been done.

Less money overall or less CGT?

The point is that an increase in CGT is designed to stop income class "conversion", so a drop in CGT takings will prove nothing.

tim

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