View the article online at http://citywire.co.uk/money/article/a659513
'Super tax' would hit second-homers and pensioners
A Liberal Democrat group has proposed new tax rises. Lib Dem Cabinet minister Vince Cable admits some ideas are 'wacky'.
The Liberal Democrat party is putting its weight behind a raft of punitive tax measures including levying national insurance on pensioner incomes, a death tax and a property super tax.
The party has already called for a mansion tax on properties worth over £2 million, an idea which was watered down by the coalition in favour of a 7% stamp duty on homes worth £2 million or more.
However, a party working group is now looking at whether it should back a property ‘super tax’ that would cover all assets, including second homes. The plan for the super tax has been set out in a consultation paper that will be put before the party’s spring conference next month.
Proposals put forward include:
- A mansion tax on properties worth £2 million or more, including taxing those with multiple properties with a cumulative value of over this amount.
- Reducing the annual pension tax relief from £40,000 to £30,000 and the lifetime allowance from £1.25 million to £1 million.
- Introduction of national insurance contributions on pensioners’ earned income.
- Extend the period for gifts becoming exempt for inheritance tax purposes from seven to 15 years.
- Levying capital gains tax when assets are sold after death, currently assets are not liable to CGT when the owner of the assets dies.
- Introduction of a land value tax, including a charge on under-used sites, to try and reduce property prices.
- Reform of council tax to try and differentiate very expensive properties.
- Extend national insurance contributions to benefits in kind.
- Increasing the tax-free personal allowance to £12,000.
There is also a proposal for a net wealth tax – branded a ‘jewellery tax’ but this is unlikely to go ahead and Lib Dem business secretary Vince Cable described it as ‘wacky’ and ‘completely impractical’.
Cable has also played down the proposals, he told Sky News: ‘Some of the [working group’s] ideas are interesting, some are a bit wacky. The idea of taxing jewellery is completely impractical and intrusive. There are ideas in there I’m sure will not get any further.’
Cable also refused to say whether the Lib Dems supported Labour’s plans for a mansion tax to fund a return of the 10p income tax rate.
‘I think the Labour party is playing political games but I’m nonetheless please they’re endorsing [the mansion tax],’ he said.
‘It’s up to them to be statesmanlike and sensible in how they approach it.’
News sponsored by:
After Boris announced he was backing Brexit, sterling suffered its biggest slump in six years. Our Market Mavens discuss. Follow the Market Mavens LinkedIn page for weekly videos, in which our panel of industry experts share their views on financial news
The Citywire guide to investment trusts
In association with Aberdeen Asset Management
More about this:
More from us
- Can I give away my home to avoid inheritance tax?
- Budget 2012: Osborne cuts taxes, chases tax evaders
- Inherited Spanish property? You could be in line for a tax windfall
- Osborne shocks with shares-for-rights contract
- Mansion tax: a terrible, unworkable idea
- Property rich? Watch out! The mansion tax is coming
- Mansion tax could replace 50p income tax rate
- Capital gains tax: what is it and do we really need it?
- More people caught by inheritance tax: how to avoid death duty
- Government extends inheritance tax to pay for long-term care
Tools from Citywire Money
From the Forums
Weekly email from The Lolly
Get simple, easy ways to make more from your money. Just enter your email address below
An error occured while subscribing your email. Please try again later.
Thank you for registering for your weekly newsletter from The Lolly.
Keep an eye out for us in your inbox, and please add firstname.lastname@example.org to your safe senders list so we don't get junked.
by Himanshu Singh on May 26, 2016 at 03:26