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Second-class stamp posted amid stealth

By Mark Chilton

A Budget for homebuyers – hardly. More an announcement that the main target for stealth tax is moving from National Insurance and pensions to the homeowner – and the Chancellor can sit back and watch inflation fill his coffers.

First, the positives. Doubling the stamp duty threshold will allow up to 350,000 homebuyers to escape a bill of as much as £1,200. It will help the property poorest but the failure to regionalise at least this starter threshold, not making the tax progressive and no announcement on future indexation all disappoint since it could have been funded by a higher tier over £1m – real redistribution of property wealth.

Little is known about the shared ownership initiative with the Council of Mortgage lenders – particularly the CML themselves judging by their press reaction. It is a good and necessary idea but the partnership proposed by Mr Brown means he wants lenders to take the equity share. He should have considered other more willing investor groups, particularly with residential investment becoming Sipp-eligible next year.

Now to the stealth taxes. Everyone seems overly excited by the superindexation of IHT thresholds. Actually, it is a massive underindexation in real house price terms which will bring substantial numbers of middle England families into IHT. If ever there was a vote-winner for Michael Howard, it would be to exclude principal residences from IHT. Second, the one negative from the harmonisation of civil couples’ rights is the loss of their ability to each hold a CGT-exempt property after December 5. Again, the take on CGT on the burgeoning buy-to-let sector should have been approached with a lifetime cap approach similar to the new pension cap.

It is not what the Chancellor did that hurts – it is what he didn’t. And rather than subtly suggesting that actuaries need formal regulation, might he not have better aimed at estate agents?


Fundamental takes Aim for IHT planning

A new inheritance tax planning portfolio service is aiming to offer the advantages of Aim and Ofex investments to IFAs seeking an alternative approach.


Is buy-to-let a bubble about to burst? “No, it is not a bubble set to burst but it is certainly a dead market and no one new is coming into it. It is harder to get get high loans to value, too.” Peter Sharman, Optimum Financial Solutions “Yes, I think so. London is saturated and […]

Correspondent’s Week

I planned to model my diary for the week on Piers Morgan’s new book but I have to admit this has been a week of failures. I failed to get invited to lunch at Number 10, I don’t have any tales to tell about Princess Diana and I don’t believe that influential businessmen get all […]

How do you choose the best online service?

By Ross Jackson, senior marketing manager There are many different protection online services available in the market and no doubt you’ll have used a few when submitting protection business. But why should you have to put up with slow, unresponsive sites for your business when you’re used to dealing with slick, modern user experiences in your […]


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