Jump to content
House Price Crash Forum
dothemaths

Cgt- Looks Like They've Caved

Recommended Posts

http://www.dailymail...ected-hike.html

Work and Pensions Secretary Iain Duncan Smith signalled a dramatic climbdown by saying the Chancellor will 'take the sting out of' the tax rise.

George Osborne and Prime Minister David Cameron are under growing pressure from senior Tories to water down Liberal Democrat plans to raise CGT from 18 per cent to match the 40 and 50 per cent income tax rates.

Critics are furious the tax will hit middle-class savers who have invested in second homes and shares to give themselves a retirement nest egg.

Can't say I'm surprised.

The economy has to be rebalanced but big cojones are needed to do it against some powerful self interested lobbies.

Looks like DC doesn't have them.

This will stop the flow of new properties onto the market - HPC over for now.

Share this post


Link to post
Share on other sites

http://www.dailymail...ected-hike.html

Can't say I'm surprised.

The economy has to be rebalanced but big cojones are needed to do it against some powerful self interested lobbies.

Looks like DC doesn't have them.

This will stop the flow of new properties onto the market - HPC over for now.

Its the Mail....no testosterone allowed.

Share this post


Link to post
Share on other sites

I was so worried about the Wilsons and other 'ordinary holders of propery portfolios'. I look forward to a restful sleep tonight. God bless all ordinary hard working familiies.

Share this post


Link to post
Share on other sites

Perhaps this is a crazy idea, perhaps it wouldn't have as much of an effect on house prices as I think it would but wouldn't a reasonable policy be to extend the rate of CGT sellers pay on gains from homes other than their private residences so that it also included all residences?

Perhaps, get rid of Stamp Duty entirely but instead have a flat rate tax for all CGT. Say 25% on everything; shares, gold, houses etc...

Surely this would be simpler to administer, stop the loopholes (i.e. the 'flipping' of ownership pre/post sale) and be in-line with the policy used for gains for all other asset classes?

Or is this just a non-sensical suggestion....

Share this post


Link to post
Share on other sites

It's clear to me that the government will not have the @rsehole to make the cuts/taxations necessary to make the cuts required. There's just too many many powerful VI's (esp in the media) wanting to protect their piece of the pie - see current CGT whiners.

The public just won't accept preemptive action to prevent collapse. The best we can hope is that we can somehow bring ourselves back from the brink once it becomes crystal clear to everyone that sacrifices must be accepted. Of course by then it will be much worse.

Sorry if I'm stating the bleeding obvious - it's just that, with all the crap of the past week, I'm feeling increasingly despondent that the new Gov is any more likely than the last to do the right thing.

Share this post


Link to post
Share on other sites

If true, DISGUSTED.

Yep, looks like the army of spivs and Estate Agents are once again going to be bailed out at the expense of the home ownership prospects of future generations

Share this post


Link to post
Share on other sites

Maybe 'taking the sting out' means annual allowance kept at about 10k, anything over taxed at 40%. Seems fair to me.

Perhaps this is what was planned all along.

or maybe the introduction of some type of retirement relief.....

if they introduced the plan that the backbenchers were suggesting (no CGT after 5 years) then there would be very little CGT paid as most rich people can afford to wait 5 years before selling. most of the income into capital schemes I see at work (i'm tax accountant in industry) rely on medium term gains so the well paid employees would be rubbing their hands in glee if all gains after 5 years were exempt as was initially suggested.

Share this post


Link to post
Share on other sites

If they cannot get something as simple as this put through without umpteen clauses in there then how the hell are they going to sort out the deficit and reduce our debt pile? :rolleyes:

Edited by MrFlibble

Share this post


Link to post
Share on other sites

Exactly, the problem is very clear. CGT is on unearned income and you need a profit to pay it. If the goverment can't even deal with this straight forward issue then how will they address the real problem of the deficit. Cameron needs to show he has the stomach for the fight, so far all there is is lack of judgement and words; change, broken Britain, big society.....

If property became subject to CGT, then in an HPC, losses could be offset against other Capital Gains. If the HPC we hope for does occur, it may be best that second homes are not subject to CGT for the time being.

Edit: This may even be a reason for the government backing out of CGT on second homes, if they anticipate any HPC then they could expect CGT revenues might be low (or even negative, but unlikely).

Edited by happy_renting

Share this post


Link to post
Share on other sites

But, but.... an increase in CGT is required to pay for the Liberals cut in basic income tax threshold. Or will there just be more cuts in employment?

Share this post


Link to post
Share on other sites

or maybe the introduction of some type of retirement relief.....

if they introduced the plan that the backbenchers were suggesting (no CGT after 5 years) then there would be very little CGT paid as most rich people can afford to wait 5 years before selling. most of the income into capital schemes I see at work (i'm tax accountant in industry) rely on medium term gains so the well paid employees would be rubbing their hands in glee if all gains after 5 years were exempt as was initially suggested.

they could mew.

Share this post


Link to post
Share on other sites

Good question so where will the cuts come from if not CGT? Anyway, despite this, there is still much to be done in reducing the deficit.

Share this post


Link to post
Share on other sites

Yep, looks like the army of spivs and Estate Agents are once again going to be bailed out at the expense of the home ownership prospects of future generations

Please be reasonable Pete. You can't expect these hard working entrepreneurs & commission mostly folk to cough up £800,000,000,000? + all by themselves.

We should all do our bit, shouldn't we?

EDIT:- zero confusion syndrome

Edited by Laura

Share this post


Link to post
Share on other sites

Good question so where will the cuts come from if not CGT? Anyway, despite this, there is still much to be done in reducing the deficit.

Presumably from single young(ish) people around the age of 30 who rent, dont have a mortgage and earning about £30,000.

I wish I was joking.

:(

Share this post


Link to post
Share on other sites

Reality probably hit these guys. The big business players probably told them if you ever want us to invest anything in Britain do not raise the CGT.

Instead of raising the CGT they should be lowering income taxes.. especially for people below the living wage level. Who should not be paying any income tax.

Every time they lower income tax it is a huge stimulus to the economy. Like a family of 4 with an extra £1,000 a year in their pocket really adds up.

Share this post


Link to post
Share on other sites

Reality probably hit these guys. The big business players probably told them if you ever want us to invest anything in Britain do not raise the CGT.

Instead of raising the CGT they should be lowering income taxes.. especially for people below the living wage level. Who should not be paying any income tax.

Every time they lower income tax it is a huge stimulus to the economy. Like a family of 4 with an extra £1,000 a year in their pocket really adds up.

What if that family of four choose to spend it on a foreign holiday? Sure, the govt still gets a few bits and bobs from airport taxes and suchlike, but it wouldn't take many families choosing to spend their £1000 abroad to result in a boost to the economies of those countries that have nicer weather.

PS: That's not to say I don't favour lower taxes for workers, I'm just highlighting why they might not always be beneficial to the UK's ecomony.

Share this post


Link to post
Share on other sites

http://www.dailymail...ected-hike.html

Can't say I'm surprised.

The economy has to be rebalanced but big cojones are needed to do it against some powerful self interested lobbies.

Looks like DC doesn't have them.

This will stop the flow of new properties onto the market - HPC over for now.

The properties were not going to sell anyway so it makes no real difference? The wealthy have already sold the property they wanted to sell, only the sheeple are left holding property like a drunk gambler re-checking his cards as the casino burns. As jobs are lost HPC will accelerate, CGT is a side show IMO.

Share this post


Link to post
Share on other sites

http://www.dailymail...ected-hike.html

Can't say I'm surprised.

The economy has to be rebalanced but big cojones are needed to do it against some powerful self interested lobbies.

Looks like DC doesn't have them.

This will stop the flow of new properties onto the market - HPC over for now.

...falling at the first hurdle in every way ...they need to a get a grip...... :rolleyes:

Share this post


Link to post
Share on other sites

What if that family of four choose to spend it on a foreign holiday? ...

Most "stimulus" will result in increased consumption of imported goods even if it isn't blown on overseas holidays. This is why classic Keynesian measures are not working like they should. Similarly turning the pound into parity with the Lat isn't going to help manufacturing as just about all the raw materials for manufacturing are imported (and most of the machinery too). Thatcher was adamant that Britain could export services like insurance and banking. Brown did not reverse this trend and if anything made it worse. The current "crisis" has been one that has hit the service industries - particularly finance - hard. Add to that the trend to outsource much of the leg-work of the service industries to low cost economies like India and you can see there is no clear route out the sh1t. The reality of this situation was clear in about 2000 and the warning shot was the collapse of the internet bubble which demonstrated so very clearly that the service economy would follow manufacturing overseas to low labour cost economies. Borrowing billions against ever rising house prices has enabled the reality to be ignored for a decade. House prices will rise no further, reality can no longer be ignored. Western standards of living will decline steadily from this point onwards until they match the low cost economies.

Share this post


Link to post
Share on other sites

What if that family of four choose to spend it on a foreign holiday? Sure, the govt still gets a few bits and bobs from airport taxes and suchlike, but it wouldn't take many families choosing to spend their £1000 abroad to result in a boost to the economies of those countries that have nicer weather.

Even so, the fact that they worked and produced in the uk, now means that somebody else can buy their product rather than buying abroad

Share this post


Link to post
Share on other sites

The proof will be in the pudding. If we see a contraction in the number of properties for sale over the next week then we will know it was due to the CGT hike. I doubt it though, even deluded property pensioners couldn't be expecting to get a sale and exchange contracts in 3 weeks

Share this post


Link to post
Share on other sites

Even so, the fact that they worked and produced in the uk, now means that somebody else can buy their product rather than buying abroad

That's presming they've produced anything - just 3 million of a working age population of 38 million work in the broad manufacturing sector - and presuming that what they have produced has been consumed here rather than being exported.

Share this post


Link to post
Share on other sites

Maybe 'taking the sting out' means annual allowance kept at about 10k, anything over taxed at 40%. Seems fair to me.

Perhaps this is what was planned all along.

I seem to remember this is how it was in the late 90's. Allowance was around 7K and then 40% on capital gains.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.