Filed under: Tax
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The Lib Dems kicked off the party conference season and this year they are clearly trying to distance themselves from their coalition counterparts with a decidedly left, anti-wealth stance.No doubt to the chagrin of many Tories, Nick Clegg and his cronies have gone all out radical and have proposed more take for, well almost everything that even looks remotely like a 'gain' or a bit of wealth.
First up is the super mansion tax. Not content with the 1% 'mansion tax' on property over £2 million that business secretary Vince Cable was championing last year Lib Dem president Tim Farron wants their to be a tiered system where those with property over £2 million pay even more.
It could possibly have something to do with estate agents Knight Frank saying that in order to raise the cash the Lib Dems hope to they would need to drop the mansion tax threshold to £1.25 million.
If your house isn't worth that much don't worry, the party has found another way to tax you. It wants to increase capital gains tax (CGT) and restore it to 20% and 40%, inline with income tax. It also wants to cut the CGT allowance from over £10,000 to just £2,000. There is also some vague notion of allowing people to use their personal allowance to offset capital gains as well as income.
Mixing up capital gains and income seems like some horrific recipe for administrative disaster if you ask me.
And then there is the most unpopular of taxes; inheritance tax (IHT). Brits have endured a freeze in the IHT threshold since 2009 and have to wait seven years before any gifts given to loved ones fall outside of the IHT net. The Lib Dems want to increase that to 15 years and in a more radical shake-up of the tax even want the tax to be based on the beneficiary's wealth rather than the estate that they have benefitted from.
The detail is scarce but I'm assuming that you'd only be charged the 40% IHT if you earned over a certain amount or your wealth exceeded a certain threshold - a means tested tax if you will.
Again, an admin disaster waiting to happen.
The proposals are radical and the party should enjoy the headlines that their policies are creating at the moment because let's face it, they're never going to see the light of day.
