Political Sharks Are Circling For Your Tax Cash

OK, so guess what folks, elections are looming, in case you had not noticed. The parties are already out there telling us how they will make the corrupt system that they invented so much better for us.

Yeah, there is nothing like a dose of irony to set you right for the day.

We hear that Nick Clegg has some pretty lofty ideals when it comes to tax and second homes for MP’s. The thing about human nature is that no matter what rules you set, there will always be some who seek to circumnavigate them for greater gain. We see this over and over again within property investing.

The Proposals

1. See the second homes allowance replaced with expenses for only basic utility bills, council tax and either rent or mortgage interest.

Which makes you wonder, why isn’t that the case already? When was the last time you applied for a job with expenses and were told you could buy a house and claim for evry tiny thing which was unrelated?

2. He suggests measures to stop MPs making a profit from any part of a mortgage funded by the taxpayer.

Hmm. That’s a tricky one to get everyone to agree to. Can’t see that ever becoming a reality. It’s a very lofty ideal, but not workable in the real world and would still be open to abuse. What if mortgages are changed in structure by the banks-we all know the banks and govt work hand in hand. I may be a tad cynical here, but some banker is bound to invent a product which would work in MPs favour and falls ‘outside’ the new rules.

3. MPs should be stopped from buying second homes altogether. (This proposal was rejected by Mr Brown and Mr Cameron last week.)

Now that is actually quite sensible. Do they really need a second home? Surely a B&B would suffice? However, there is no profit in it for the party members, so its been dropped already. No surprise really.

4. The taxpayer should get a share of any capital appreciation in the value of the property, proportionate to the amount funded out of public funds.

This is clearly NOT going to work in the real world-MP’s giving back money??? C’mon, surely that was not a real proposal? It would be a ridiculously difficult system to administer. Still, they could always employ more civil servants to do that I suppose.

5. Treasury spokesman Vince Cable will announce plans for a 0.5% annual levy on the most expensive homes, raising £1bn.

So, basically this is the same old merry go round. Tax the rich and give to the poor. YAWN. Can they not find another record to play? Continuing to over tax the wealthy will mean that they will find other ways to move their cash away from the UK altogether. Since the potential 50% tax bracket was raised my IFA has told me he has had an extraordinary amount of inquiries about tax mitigation, trust funds and offshore tax. We all know we are in for a tax hammering to pay back the bailed out banking system. I know what I’ll be doing.

An Interesting Parallel

Yesterday I had a mentoring enquiry from a chap who is looking to start out in property. He has little money for deposits and has spent some cash already on looking at portfolio builders and deal sellers. This has an interesting parallel with what the various parties have been spouting of late.

This year saw the huge outcry over MP’s expenses claims, and, claiming for a second home was seen as one of the major scams this year. In property as with so many other things, when you give your money ( or taxes) to someone else to use on your behalf, the chances are they will find a way to benefit from it by a greater proportion for themselves. There’s a lesson in there folks.

Now is the time to act if you are worried about how the new proposed tax laws will effect you personally or your portfolio. If you have amassed wealth with property and would like to hang on to it for your family and loved ones, don’t leave it until the new laws come in. Get a plan in place now to legally pay minimal tax on your investments. Please click here contact us via our main web site, and we will put you in contact with someone who can help.

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