Proposed mansion tax could affect householders in the South West
Wednesday 13th April 2011
The Chancellor's comments about a Property Tax passed under the radar in the publicity surrounding last month's Budget.
H M Revenue & Customs has been asked by the Chancellor to investigate ways of moving away from the 50p tax rate imposed on those earning £150,000 and over, which is regarded as a temporary measure. Vince Cable has suggested this week that there may well be a shift to the taxation of wealth, including property.
Just how property might be taxed is still unclear. The Liberal Democrats had proposed a "Mansion Tax" of an annual 1% levy on homes worth over £2m. This would have hit many home owners in the South West, where there are a large number of valuable properties.
Plans now might include the review of Council Tax which, of course, is already a levy on all home owners, or the restructuring of Stamp Duty - which may mean a further tax on any transfer of a property. Plans by the Conservatives to reform Inheritance Tax appear to have been put on hold.
Both Devon and Somerset have large rural communities, where many properties have passed down through the generations. Not everyone living in a large property has a large disposable income to carry any additional tax burden. Many people are already concerned about the prospect of selling their homes to pay for the cost of care in their old age. Most wish to protect their wealth for future generations whilst not impoverishing themselves - a difficult balancing act to achieve. The uncertainty surrounding the Coalition Government plans for any tax on property highlighted by Vince Cable's recent comments only serves to emphasise the need for proper estate planning.
It is important to have a Will in place that reflects both yours and your family's personal circumstances.A well written Will can be sufficiently flexible to deal with differing eventualities.
Ashfords' Trusts and Estates Team can assist on any matters regarding a Will or Trust. For taxation and estate planning advice please contact Michael Alden at the Exeter office on 01392 334041, Sue Savill at the Taunton office on 01823 232313 or Rachael Crocker at the Tiverton office on 01884 203088.
Ashfords LLP is regulated by the Solicitors Regulation Authority. The information in this note is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.
