"Andy Hall" wrote
| "Owain" wrote:
| | What about removing residency and spousal inheritance exemptions from
| | CGT and replacing Stamp duty and allowing a tax-free gain in value
| | per annum equal to the bank base rate, compounded annually. Any gain
| | in value above tax-free gain taxed at 80%.
| IHT should be abolished. The deceased has already paid income tax,
| VAT and possibly CGT and frequently has little left to bequeath, even
| less if long term care is required in late life.
| For many of the elderly, this is a source of considerable distress
| because they would like to be to hand something to their children or
| grandchildren. For 40% of it to be ripped off by the government is
| not appropriate.

Good point, so under my suggestion remove inheritance tax and do not regard
transfer of ownership by inheritance as a sale. The children can inherit the
house with no immediate tax liability, but the gain tax will be due when the
property is next sold, if it's sold at a profit more than the tax-exempt
gain.

| Anyway, it's a marginal rate, in the example I gave it equals a tax
| of 32% on the overall growth or 16% on the curent market value,
| which compares fairly with general income tax rates or even 17.5%
| VAT. It would apply mostly to those who have a grossly-inflated
| house value through artificial market conditions,
| Well are the market conditions artificial? Prices are only based on
| what the market will stand and what people can afford. That will
| change automatically, as it always does when interest rates begin to
| rise. Those who are most over extended will have their wings
| clipped first.

Because house prices have risen so unevenly across the country and have
risen more than demand (population hasn't doubled in 5 years, neither has
the number of households).

Yes, it's a sort of windfall tax on the sort of artificial market where
people can borrow 100%+ mortgage, buy a house, live in it rent-free for a
year, pay no mortgage payments, and still make a hefty profit when it's
reposessed.

Owain