By William Mills.
Alarming reports that 30% of income tax receipts come from only 1% of the highest paid earners brings back fears of the 1970’s brain drain when Labour Government taxes forced Britain’s ablest to flee abroad as tax exiles.
Rt. Hon. George Osborne MP
George Osborne, probably the most able Chancellor of the Exchequer since WWII, needs to use his customary foresight to defuse an exodus of the most able, as well as bolster support among the hard pressed Tories in the South East.
Chancellor of The Exchequer
In 2007 the Chancellor in his Blackpool Conference speech said;
“I want lower taxes. I will always be looking for ways to bring taxes down. We are the low tax party. We are on your side. Well over a third of homeowners in Britain have the threat of Inheritance Tax hanging over them. People who have worked all their lives. People who have saved money all their lives and who want to pass something on to their families.
We will take the family home out of inheritance tax.”
It is vital Mr Osborne convinces his Coalition colleagues of the importance of delivering on these promises by lifting the threshold on Inheritance Tax to £2 million. All the Capital Taxes combined bring in a tiny proportion of the Government’s total tax take and take up a disproportionate amount of the Inland Revenue’s time dealing with lengthy disputes over land valuations.
If his Coalition colleagues’ hampering of Britain’s revival won’t allow the Chancellor to do what is right and raise the threshold, then he should be permitted to simplify the tax saving the taxman thousands of hours in bitter disputes.
Capital Gains Tax
This can be done by extending Capital Gains Tax rules across to Inheritance Tax in respect of the Principle Private Residence where the gain on the taxpayer’s home is exempt from tax. The family home could also be exempted from Inheritance tax by assessing it at cost price. The HMRC could easily draw up a universal chart quantifying the inflationary gain over the years of ownership.
The Chancellor must be allowed to correct this abnormality before the next election otherwise the Tories’ chances of winning look dour.
The South East has both the highest house prices and greatest concentration of Tory voters. Many of whom, already being driven into the arms of UKIP over fears about immigration, are also facing the prospect of losing the family home to death taxes.