LEAVE the Conservative Party and save your country!
Comments
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Buying through a company now incurs a hefty stamp tax and won't help anyone who hasn't bought through a company. Plus there is CGT on shares, so you won't avoid the tax.rjsterry said:
Buying through a company already happens, as does agreeing a sale price other than the market value. The incentive to try will not disappear.TheBigBean said:
There's no work around, because buyers and sellers need the stamp.First.Aspect said:
Oh for some reason I thought it was 40%.TheBigBean said:
Let's say your dad sells his house and buys a smaller one for £400k. Then he will pay tax at 28% on £600k. This would still give him a massive windfall, just a taxed one.First.Aspect said:
I know. But there is a generation plus of people living in houses that have increased in value by an order of magnitude. The initial value is negligible compared tp what its worth now.rick_chasey said:
it's not 40% on the value of the house. it's 40% on the gain.First.Aspect said:
If you sell a house, that's when cgt would be triggered. So instantly nan and grandad would have only 60% of the value of their home with which to buy another one. For a fair number of people, that won't be enough.rick_chasey said:
Why would it be tax on moving, if when you die it's set at the same rate? It would just be a tax on capital gains, regardless.First.Aspect said:
If you whack 40% gct on primary residence, this will be more or less 40% tax on moving house for a lot of people, and make downsizing quite hard to do, unless downsizing a lot.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
All that will do is choke supply in the middle and upper ends of the market and raise prices.
Discuss.
So thinking about it, not only would this reduce supply, but also encourage higher asking prices.
As an extreme example, my Dad bought a house in 1980 for £28k. It is now worth about £1M.
Then when he dies the remaining CGT would be due on £372k.
His remaining estate of £600k cash + 72% of £372k would be subject to IHT.
I suppose the deferral on the remaining cgt would help reduce the damage to that part of the property market.
So what's the work around? Because if you come up with a new tax, there'll be a new loophole.
Buying not at an arms length rate is also pretty obvious and would only help connected parties who could be subject to additional measures.
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So what is massively increasing tax for most property transactions going to achieve other than to make people ask for higher prices to compensate? Or waiting as long as possible to sell in a rising market?1
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I only came for a three post argument.First.Aspect said:So what is massively increasing tax for most property transactions going to achieve other than to make people ask for higher prices to compensate? Or waiting as long as possible to sell in a rising market?
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You won't get elected.TheBigBean said:
I only came for a three post argument.First.Aspect said:So what is massively increasing tax for most property transactions going to achieve other than to make people ask for higher prices to compensate? Or waiting as long as possible to sell in a rising market?
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Worked for BJ. 😉First.Aspect said:
You won't get elected.TheBigBean said:
I only came for a three post argument.First.Aspect said:So what is massively increasing tax for most property transactions going to achieve other than to make people ask for higher prices to compensate? Or waiting as long as possible to sell in a rising market?
The above may be fact, or fiction, I may be serious, I may be jesting.
I am not sure. You have no chance.Veronese68 wrote:PB is the most sensible person on here.0 -
As both FA and I have both said, it sticks a massive spoke in the housing market. Which tax aside, is not a good thing. It also reduces SD receipts in the short term and allows a lot of interim IHT planning by those best placed to do it.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
Failing that, it will tend push the internationally mobile rich away from the UK and we lose the other taxes that they would have paid in the UK.
So at best the proposal is naive and very probably counter productive in terms of overall tax take."I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
See above. It is likely to be counter productive, like your misplaced wealth tax ideas.rick_chasey said:
Why would it be tax on moving, if when you die it's set at the same rate? It would just be a tax on capital gains, regardless.First.Aspect said:
If you whack 40% gct on primary residence, this will be more or less 40% tax on moving house for a lot of people, and make downsizing quite hard to do, unless downsizing a lot.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
All that will do is choke supply in the middle and upper ends of the market and raise prices.
Discuss.
A quick reminder of the real life experience of Sweden when it abolished IHT and increased the tax take:
https://telegraph.co.uk/tax/news/sweden-ditched-inheritance-tax-business-boom/
So if you want to increase the overall, tax take, what would you do?"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
That sounds like the politics of envy to me.super_davo said:Personally I'd reduce the local authority subsidies from central government and increase council tax to offset. With more and higher bands, and second home uplifts.
i.e. you can live in that £1million home on your own just fine, but it will cost you £10k per year to do so.
That will encourage downsizing when you no longer need the space to "free up housing", stop hoarding of property as investments and miles less faffing than CGT exemptions and the like. And it doesn't need to be Draconian and cliff edge, you can have progressive rates and bands and exemptions.
Reckon the Poll Tax scared anyone off fiddling around with local taxation in that way mind.
Forcing people to move from a house where they may have lived for a long time and have emotional connections etc is not a winning strategy unless you want to punish 'the rich'. For info, terraced houses in the London burbs can cost £1m, but the people who live in them are often not rich. Are these really the people you want to punish?"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
It will give the lefties a nice warm feeling that they have somehow given 'the rich' a kicking, despite the likely outcome of reducing the overall tax take.First.Aspect said:So what is massively increasing tax for most property transactions going to achieve other than to make people ask for higher prices to compensate? Or waiting as long as possible to sell in a rising market?
I wonder if it is a good time for a reminder of the old tax parable about the 10 men in a bar?"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
See above, it is a bad idea as it is likely to achieve the opposite of what you want.rick_chasey said:
oh no, how awful. Smack up IHT to the same for the house so you don't get away with not paying it by dying.First.Aspect said:
I know. But there is a generation plus of people living in houses that have increased in value by an order of magnitude. The initial value is negligible compared tp what its worth now.rick_chasey said:
it's not 40% on the value of the house. it's 40% on the gain.First.Aspect said:
If you sell a house, that's when cgt would be triggered. So instantly nan and grandad would have only 60% of the value of their home with which to buy another one. For a fair number of people, that won't be enough.rick_chasey said:
Why would it be tax on moving, if when you die it's set at the same rate? It would just be a tax on capital gains, regardless.First.Aspect said:
If you whack 40% gct on primary residence, this will be more or less 40% tax on moving house for a lot of people, and make downsizing quite hard to do, unless downsizing a lot.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
All that will do is choke supply in the middle and upper ends of the market and raise prices.
Discuss.
So thinking about it, not only would this reduce supply, but also encourage higher asking prices.
As an extreme example, my Dad bought a house in 1980 for £28k. It is now worth about £1M.
(I do honestly think this is a great case for a wealth tax.)"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
A source I looked at showed that in Europe, only 2 countries levy tax on gains from sale of main residences, and even then these are very lightly taxed. Which should show you what a bad idea it is in reality.TheBigBean said:
I only came for a three post argument.First.Aspect said:So what is massively increasing tax for most property transactions going to achieve other than to make people ask for higher prices to compensate? Or waiting as long as possible to sell in a rising market?
"I spent most of my money on birds, booze and fast cars: the rest of it I just squandered." [George Best]0 -
Depends entirely on how you implement it. However, what's clear is a lot of people made a lot of money on property and whilst you might say "good for them"; the flip side is that the next generation needs to pay more and more or the whole ponzi scheme collapses. Property has always had the "investment vs somewhere to live" aspect to it and government policy over the last 40 years tipped it firmly towards the former. Taxation should always be about incentivising things rather than punishment, and to me this would just be incentivising having the house you need rather than the house to shield your wealth using main residence tax breaks!Stevo_666 said:
That sounds like the politics of envy to me.super_davo said:Personally I'd reduce the local authority subsidies from central government and increase council tax to offset. With more and higher bands, and second home uplifts.
i.e. you can live in that £1million home on your own just fine, but it will cost you £10k per year to do so.
That will encourage downsizing when you no longer need the space to "free up housing", stop hoarding of property as investments and miles less faffing than CGT exemptions and the like. And it doesn't need to be Draconian and cliff edge, you can have progressive rates and bands and exemptions.
Reckon the Poll Tax scared anyone off fiddling around with local taxation in that way mind.
Forcing people to move from a house where they may have lived for a long time and have emotional connections etc is not a winning strategy unless you want to punish 'the rich'. For info, terraced houses in the London burbs can cost £1m, but the people who live in them are often not rich. Are these really the people you want to punish?
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Tell me about Sweden's capital gains tax on sales of property.Stevo_666 said:
See above. It is likely to be counter productive, like your misplaced wealth tax ideas.rick_chasey said:
Why would it be tax on moving, if when you die it's set at the same rate? It would just be a tax on capital gains, regardless.First.Aspect said:
If you whack 40% gct on primary residence, this will be more or less 40% tax on moving house for a lot of people, and make downsizing quite hard to do, unless downsizing a lot.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
All that will do is choke supply in the middle and upper ends of the market and raise prices.
Discuss.
A quick reminder of the real life experience of Sweden when it abolished IHT and increased the tax take:
https://telegraph.co.uk/tax/news/sweden-ditched-inheritance-tax-business-boom/
So if you want to increase the overall, tax take, what would you do?
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Because its not an investment for a lot, or most, people, its a home.
So you need to make a choice, tax people for buying their home, or don't tax people buying houses for investment.0 -
My take would be that if you taxed main residence gains, it would incentivise staying put rather than moving, downsizing etc. Which would gum up the market and make it harder to get on than it already is.rick_chasey said:Flip it around, why shouldn't their gains be taxed, just like any other investment?
Could get around it with minimum thresholds etc. but then it gets more complex and more likely people will develop schemes to avoid.0 -
They don't have to buy it, right? They could also rent.First.Aspect said:Because its not an investment for a lot, or most, people, its a home.
So you need to make a choice, tax people for buying their home, or don't tax people buying houses for investment.
And you don't get taxed for buying it. You get taxed on the "gains from it".
You're still making a profit on it, right?
No different to any other investment. I don't hear many clamours around stock market investments not being liquid enough because of capital gains tax.
Hell, we have stamp duty on houses, which is specifically a transaction tax. So if you're worried about liquidity, then surely you'd go after that, rather than CGT?0 -
F o r m o s t p e o p l e i t i s n o t a n i n v e s t m e n t i t i s a h o m erick_chasey said:
They don't have to buy it, right? They could also rent.First.Aspect said:Because its not an investment for a lot, or most, people, its a home.
So you need to make a choice, tax people for buying their home, or don't tax people buying houses for investment.
And you don't get taxed for buying it. You get taxed on the "gains from it".
You're still making a profit on it, right?
No different to any other investment. I don't hear many clamours around stock market investments not being liquid enough because of capital gains tax.
Hell, we have stamp duty on houses, which is specifically a transaction tax. So if you're worried about liquidity, then surely you'd go after that, rather than CGT?
Hope that helps.
If you want people to rent instead if buy, who are they renting from exactly? Are you suggesting that property becomes only an investment for the very rich?
In that case, how about a tythe as a system of paying for accommodation? Much more progressive than rent, don't you think.
Once you've had another great idea, like cutting your toenails with a lawnmower, let us know.
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I'm surprised so many people work given the requirement to pay income tax.1
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it is literally an investment. Often a leveraged one at that.
*You don't need to own your own home*0 -
Should add 35% of the UK population lives in rented accommodation.
https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate
Germany, about half of the population live in rented accomodation.0 -
How do you compare the gains from general rise in values versus adding floor area? Are the building costs fully deductable in calculating the gains? Do you need to keep records of the costs of all building maintenance costs for your tax return?rick_chasey said:
They don't have to buy it, right? They could also rent.First.Aspect said:Because its not an investment for a lot, or most, people, its a home.
So you need to make a choice, tax people for buying their home, or don't tax people buying houses for investment.
And you don't get taxed for buying it. You get taxed on the "gains from it".1985 Mercian King of Mercia - work in progress (Hah! Who am I kidding?)
Pinnacle Monzonite
Part of the anti-growth coalition0 -
Yadda yadda yadda.rick_chasey said:Should add 35% of the UK population lives in rented accommodation.
https://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate
Germany, about half of the population live in rented accomodation.
So you are going to reform the UK rental market as well now?
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How many homes owned by these people do they actually live in and how many are used as tax efficient investments plus how many of those that own them pay tax in the UK? Isn't this sort of thing part of the problem in parts of London? Also, as we saw at the start of the war in Ukraine, these aren't necessarily the people we want here and there's probably a degree of money laundering going on.Stevo_666 said:
As both FA and I have both said, it sticks a massive spoke in the housing market. Which tax aside, is not a good thing. It also reduces SD receipts in the short term and allows a lot of interim IHT planning by those best placed to do it.TheBigBean said:
The tax wouldn't be avoided by death, so wouldn't be part of the estate. Therefore not moving only delays the payment.Stevo_666 said:
I reckon you're right about the last bitTheBigBean said:
All circumstances, good question and sounds reasonable. I'd probably go with the retroactive option and bring it in with immediate effect to avoid chaos.Stevo_666 said:
Setting aside the probability of this ever happening for a moment:-TheBigBean said:
I like the idea of removing CGT relief on main residences.Jezyboy said:
Banks will lend more money to higher earners. Not that shocking is it?rick_chasey said:
I like the idea of CGT for assistance swap though.
- Is this in exchange for mortgage relief, or do you just want to remove the exemption regardless?
- Would this be effective from when implemented (i.e only gains after the implementation date are taxable), or would this be retroactive to whenever the property was bought?
- And if a gain is taxable, does a loss on sale of a main residence create a tax loss that can be used against future gains? (i.e. the normal rule for CGT).
I would generously allow roll over relief though.
I won't be elected.
The problem I can see is that all these lone pensioners in big houses will probably never sell up if they are going to get a massive tax bill, which kind of puts a spanner in Rick's plan to let young families get their hands on these properties for the greater good.
Failing that, it will tend push the internationally mobile rich away from the UK and we lose the other taxes that they would have paid in the UK.
So at best the proposal is naive and very probably counter productive in terms of overall tax take.0 -
I think it's more a reaction to coming up with massive new taxes at a time of historically high taxation.TheBigBean said:I'm surprised so many people work given the requirement to pay income tax.
I'm towards the leftie side of things, but you do have to be smart about it or it gives lefties a bad name.1 -
If you prevent people from owning their own homes, you immediately dispense with the taxation problems that DIY causes.rjsterry said:
How do you compare the gains from general rise in values versus adding floor area? Are the building costs fully deductable in calculating the gains? Do you need to keep records of the costs of all building maintenance costs for your tax return?rick_chasey said:
They don't have to buy it, right? They could also rent.First.Aspect said:Because its not an investment for a lot, or most, people, its a home.
So you need to make a choice, tax people for buying their home, or don't tax people buying houses for investment.
And you don't get taxed for buying it. You get taxed on the "gains from it".0 -
How would putting CGT on the sale of a home prevent someone owning a home?First.Aspect said:
If you prevent people from owning their own homes, you immediately dispense with the taxation problems that DIY causes.rjsterry said:
How do you compare the gains from general rise in values versus adding floor area? Are the building costs fully deductable in calculating the gains? Do you need to keep records of the costs of all building maintenance costs for your tax return?rick_chasey said:
They don't have to buy it, right? They could also rent.First.Aspect said:Because its not an investment for a lot, or most, people, its a home.
So you need to make a choice, tax people for buying their home, or don't tax people buying houses for investment.
And you don't get taxed for buying it. You get taxed on the "gains from it".0 -
See discussion with RC above.Pross said:
How would putting CGT on the sale of a home prevent someone owning a home?First.Aspect said:
If you prevent people from owning their own homes, you immediately dispense with the taxation problems that DIY causes.rjsterry said:
How do you compare the gains from general rise in values versus adding floor area? Are the building costs fully deductable in calculating the gains? Do you need to keep records of the costs of all building maintenance costs for your tax return?rick_chasey said:
They don't have to buy it, right? They could also rent.First.Aspect said:Because its not an investment for a lot, or most, people, its a home.
So you need to make a choice, tax people for buying their home, or don't tax people buying houses for investment.
And you don't get taxed for buying it. You get taxed on the "gains from it".0 -
If no-one sells up then all the new build houses would be available to first time buyers (they could then be made smaller to suit the market and you'd get more housing out of a site).First.Aspect said:
See discussion with RC above.Pross said:
How would putting CGT on the sale of a home prevent someone owning a home?First.Aspect said:
If you prevent people from owning their own homes, you immediately dispense with the taxation problems that DIY causes.rjsterry said:
How do you compare the gains from general rise in values versus adding floor area? Are the building costs fully deductable in calculating the gains? Do you need to keep records of the costs of all building maintenance costs for your tax return?rick_chasey said:
They don't have to buy it, right? They could also rent.First.Aspect said:Because its not an investment for a lot, or most, people, its a home.
So you need to make a choice, tax people for buying their home, or don't tax people buying houses for investment.
And you don't get taxed for buying it. You get taxed on the "gains from it".0 -
That sounds great.Pross said:
If no-one sells up then all the new build houses would be available to first time buyers (they could then be made smaller to suit the market and you'd get more housing out of a site).First.Aspect said:
See discussion with RC above.Pross said:
How would putting CGT on the sale of a home prevent someone owning a home?First.Aspect said:
If you prevent people from owning their own homes, you immediately dispense with the taxation problems that DIY causes.rjsterry said:
How do you compare the gains from general rise in values versus adding floor area? Are the building costs fully deductable in calculating the gains? Do you need to keep records of the costs of all building maintenance costs for your tax return?rick_chasey said:
They don't have to buy it, right? They could also rent.First.Aspect said:Because its not an investment for a lot, or most, people, its a home.
So you need to make a choice, tax people for buying their home, or don't tax people buying houses for investment.
And you don't get taxed for buying it. You get taxed on the "gains from it".0
