The press has mooted the idea of Capital Gains Tax on ones PPR above £5million. Usually in these circumstances there is no ‘smoke without fire’. Were this ‘fool hardy’ idea to be incorporated in the first Budget of the new Tory administration, were they to be elected, this would be the first time that any government has had the temerity to trounce on the sacred ground of the middle to upper classes. It unquestionably would be another ‘bash’ against London residents, which, lets face it, is hardly a Tory heartland, since it is has been historically left leaning.
With the residential markets, in the upper brackets, being in a parlous state already, after the ravages of the Stamp Duty hikes, this additional fiscal imposition would ‘sound the death knell’ of the London markets in London. Homeowners would not move, now for two reasons, not just one. Why on earth would you crystallise a tax gain if you didn’t have to? You would just ‘stay put’.
If Capital Gains Tax were imposed, at the higher level, it would be reasonable to assume that the threshold could then be lowered, at some later stage in the economic cycle, once the Chancellor felt that it was a sufficient money earner for the Treasury ad politically acceptable. If this were the case then the lower to middle income groups would certainly be threatened.
I suppose the present Tory administration feels that they are in an unassailable position and if former Conservative party supporters were to become disaffected by these proposals, perhaps they would like to chose the alternative ‘Laurel & Hardy’ team of ‘Worsel Gummage’ and John McDonnell with their socialist mantras drawn straight from Marx’s Das Kapital. All this is reminiscent of a bygone era in the 70s, that we all thought we had left behind long ago.
The likes of Michael Foot, Arthur Scargill etc., and other socialist ‘Nudniks’ were banished by Thatcher in the 80s, with her ‘grass root’ reforms and perhaps this is why the UK is now the fifth largest economy in the world, with a vibrant growth and an unprecedented low unemployment rate.
Turnover of residential property sales above £5million is down by 70% and this once vibrant market is ‘grinding to a halt’ with countless other negative ramifications on other related sectors.
Imposing such a tax would be the ‘last straw’ and the prevailing ‘recession’ in this sector, would soon morph into depression. ‘Tightening the tourniquet’ around the ‘golden gooses neck’ at a critical time for the post Brexit era, does not produce any more ‘golden eggs’.
Even the new fresh faced, ‘wet behind the ears’, President Macron, is trying to undo the damage that his socialistic predecessor caused, by trying to reverse the effect of the penal taxes on the 20,000 French wealth creators, who have now set up home in Kensington, in order to lure them back to their Gaelic heartland.
Phil, if you are still the Chancellor after the post Election reshuffle, take heed of this clear warning!