Jeremy Corbyn has proposed radical new plans to squeeze more money from inheritances and tax profits on family houses, something Boris Johnson has described as “mad”. The new plans, outlined in the report titled Land For The Many, would see parents who want to help their children get on the housing ladder be severely penalised. Under Mr Corbyn’s proposals, inheritance tax would be replaced with a “lifetime gifts tax”, with an allowance of just £125,000 protected – less than a third of the current £325,000 threshold.
George Bull of tax firm RSM UK said of the proposals: “”If a Labour government forces recipients of lifetime gifts to pay income tax on them, it will play havoc with family tax planning generally and the Bank of Mum and Dad in particular.”
The report also proposes scrapping the Capital Gains Tax expedition on main homes, forcing owners to pay income tax on the profits when they move home.
Such a move would result in a “double whammy” levy on their estates when the owners die.
Homeowners in London and the southeast would be hit especially hard, as tens of thousands of pounds would be added to their average cost of moving house.
The report backs the capital gains exemption on the grounds that: “It is not only rental income that makes homes attractive as financial assets.
“It is also the expectation of making capital gains on the value of the land.
“A well-designed tax system would remove this expectation.”
But Mr Johnson has branded the plan as “mad”, telling the Mail on Sunday: “This mad ‘tax on all your houses’ would cripple ever Brit who owns or wants to own their own home.”
The Labour Party’s proposals would also immediately get rid of the “family home allowance” that gives additional protections of up to £175,000 by 2020-21 if you are passing on your home to a direct descendent.
Moreover, married couples, who are currently permitted to share allowances, would lose tax breaks worth £875,000.
Conservative Vice-Chairman Marcus Jones said: “Under Jeremy Corbyn, Britain’s homeowners would be under siege with yet another Labour tax raid on people’s homes.
“Only Conservatives are committed to lowering taxes and helping people achieve homeownership through policies such as Help To Buy and cuts to stamp duty for first-time buyers.”
Source: Read Full Article