A TAX on expensive properties will not be implemented, but the prime minister and chancellor warned the rich they will pay higher taxes before the next election.
The ‘mansion tax’ – originally proposed by Vince Cable (pictured) – would have seen a rate of 1% or 2% of the property’s value above a threshold of £1m to 2m, but both David Cameron and George Osborne ruled out its introduction.
In spite of that, Osborne – cited in the Telegraph – said he was “going to have to ask the rich to make another contribution”, but did not provide greater detail on what that would entail.
He added that he was concerned the policy “will be sold to you as a mansion tax” before the election, and then afterwards, “a lot of the people in Britain are going to wake up and find their more modest homes have suddenly been reclassified as a mansion”.
Critics of the mansion tax had expressed worries it may have caught people who are asset-rich and cash-poor.
MHA MacIntyre Hudson tax partner Katharine Arthur added that a similar measure was imminent.
She said: “From April 2013, we already have a mansion tax of sorts being introduced with an annual charge on non-residential properties, worth more than £2million, held by ‘non-natural persons’ including companies.
“We repeat our calls for an exemption for genuine property investment companies, where properties are held by companies for commercial reasons, not to avoid stamp duty land tax.”
HMRC has outlined a change in VAT policy to the treatment of dwellings that have been formed from either the construction of new buildings, or from the conversion of non-residential buildings
Let us hope that valuable asset protection vehicles are not made prohibitively burdensome or abolished in the desire to “simplify” IHT
The government is pressing ahead with changes to the way it taxes individuals with a foreign domicile
I will feel slightly awkward when I write to the client who is about to receive a large invoice from the PAYE expert, offering him the fee protection going forward