LibDems want CGT on all home sales over £1m

The Liberal Democrats are pushing for capital gains tax to be levied on all homes sold over £1m after acknowledging they will lose the battle to retain the 50p highest rate of income tax.

Chancellor George Osborne has signalled that he wants to scrap the 50p rate, which affects incomes over £150,000, as soon as practicable.

The Treasury is undertaking work on how much extra revenue is raised through the tax due to fears that it is being widely avoided.

Last month, Treasury Chief Secretary Danny Alexander said those calling for the 50p rate to be removed were “living in cloud cuckoo land” although a report in the Financial Times this week suggests the LibDems now accept it will be scrapped.

The FT reports that Business Secretary Vince Cable will be pushing for a the introduction of CGT, levied at 28 per cent, on the gains from the sale of all homes worth over £1m, rather than just second homes, as an alternative.

Chadney Bulgin mortgage partner Jonathan Clark says: “I do not think this is something that will ever happen politically. It will never be accepted, people would not stand for it.”