Withers Comments on Labour's 10p Tax Rate and Mansion Tax Plan
The Labour party has announced that it would seek to reintroduce the 10p rate of income tax, funding this through a tax on properties over £2 million — a so-called 'mansion tax'.
Chris Groves, a wealth planning partner at Withers, has an interesting take on the news.
‘The debate misses a fundamental point,’ he says, ‘which is that a mansion tax for some properties worth more than £2 million is already due to be introduced on 6 April, in the form of the Annual Residential Property Tax.
‘The ARPT will apply to residential properties worth more than £2m owned by offshore companies. While the ARPT has been presented as a targeted anti-avoidance measure to encourage the direct ownership of property, it clearly sets out how many of the practical objections to a mansion tax can be overcome.
‘For property owners currently faced with a decision as to whether to restructure ownership of UK residential property to avoid liability to the ARPT, the possibility of a general mansion tax being introduced after 2015 can only encourage the retention of existing corporate structures and defeat the original intention of the ARPT legislation.’
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Q
In this new anti-tax-avoidance era, when so many tax reliefs have been withdrawn, I've heard that investing in a Business Property Renovation Allowance scheme is one of the few remaining good opportunities for maxing your tax position. Is it true that you can get up to 100 per cent tax relief on the amount invested? And what exactly are these schemes? How do they work? What are the upsides? Downsides?
A
In this climate, it is a relief to see one potentially attractive tax allowance come through unscathed from recent criticism
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