Oct 09 2007
Well I never - government cuts Inheritance Tax!
I am delighted that the government has decided to make a substantial increase in the IHT threshold to ??600,000 for all estates where the owner has been married, rising to ??700,000 by 2010. They were clearly impressed by the strength of feelings revealed when there was such a positive response to the Conservative Economic Policy report recommending abolition, and then to the Shadow Chancellor’s pledge to raise the threshold to ??1 million, to take most people out of the net.
The government has also announced an 18% Capital Gains Tax rate. This is good news and bad news. It is good news for those making gains that would otherwise have paid tax at 40%, but bad news for people and businesses making long term gains where they were paying 10% after taper relief.The overall impact of the measure means they plan to raise more money from capital gains tax, but the headline rate is better for the UK than 40%.
The government also claims to be willing to cut ??30 billion a year out of overheads and waste by 2010-11. This includes a planned 5% per annum reduction in administration costs. There will also be further sales under the ??30 billion asset sales programme 2004-5 to 2010-11. This just goes to prove the point that there is plenty of scope to reduce spending without damaging front line services.
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
Actually …. they haven’t.
It’s more smoke and mirrors. My understanding is that it’s a transfer of the current allowances between two married individuals.
Married couples could do this already, by gifting the other person part of the wealth subject to IHT.
If you had a house subject to IHT, as a couple, you could split the ownership between the two of you - then you would both get the
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It is nice to see the Conservative Party driving the political agenda. Perhaps Mr Osbourne should have announced even more tax cutting policies at the conference as they more than likely would have been announced in parliament today by Mr Darling.
Message to Mr Cameron: See how traditional Conservative thinking can alter the party’s standing in the polls because traditional Conservative policies are popular with the electorate.
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“O theft most base, that we have stolen what we do fear to keep”
WILLIAM SHAKESPEARE
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Now we know Brown’s vision for the country - steal Conservative policies, water them down and present them as your own! He just can’t get away from his obsession of treating the British public as fools, which was why he had that supercilious grin on his face when Darling made his speech. The history of Chancellor Brown was that when the details of these reports were examined they revealed a far less rosy picture than the headline grabbing announcements given in the report to the Commons. No doubt this one will be no different.
Today’s spectacle in the Commons was quite nauseating to behold and showed the contempt that Brown and Darling have for the British people. Far from being statesmen, they showed that they care only about cheap political chicanery.
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Nice for Labour to admit that administration can be cut back. Scrapping stupid government targets would save far more, but it’s a start.
I take your point about reduced administration costs not damaging front line services, but surely that begs the question of why George Osborne committed himself to follow Gordon Brown’s spending plans for three years?
http://lettersfromatory.wordpress.com
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John, am I right in saying that the sale of second homes, buy to let homes etc are now off the hook for a 40% capital gains charge. We could see individuals taking advantage of this 18% charge with a surge of property coming on to the market.
Is it a political stealth ploy to ease a potential house price fall, by easing the “buy to debt” syndrome. In my view the affect could be opposite with a flood of property coming on to the market with a massive fall in prices.
Reply: Yes, owners of second homes will also pay the 18% CGT rate.I am not sure the government is serious about wanting more affordable homes, as a fall in house prices would be uncomfortable for them politically.
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I think Paul’s right - so far as I can tell, there’s nothing here at all.
The question is, I’m afraid as usual, why did our state broadcaster not manage to figure it out? As it is, it looks as if the initial coverage was not merely uninformative, but actually factually wrong.
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Cliff:
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