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Time for a practical tax blueprint

More than ever, the past few weeks have shown what trouble making law on the hoof can bring.

Gordon Brown and his cronies had clearly not thought through the implications of the scrapping the 10p tax band. And we have never had a considered property tax system.

More and more, tax law seems to looking down the list of usual suspects and working out how much more cash can be extracted.

The result? Well, the Government looks stupid having to back-track on poorly considered policy.

Property owners can’t run their businesses to their full potential because they never know what tax traps are around the corner.

The rules are also unfair - look at the 10p furore and the recent Burden sisters inheritance tax ruling.

Waiting in the wings we have the much-heralded income shifting legislation to stop married couples from sharing their business earnings to manipulate income tax.

What property people need is some stability that makes the rules of the game fair for everyone.

Another example is capital gains tax - last year the top rate tax charged was 40% on the disposal of an investment property, this year it’s 18%.

Who knows what it’s going to be next year?

One thing’s for sure, the Chancellor Alastair Darling doesn’t! It’s all very well for the Prime Minister wanting to redistribute the nation’s wealth to help the least able and poorest, but it seems to me the poor aren’t getting any richer and the richer are getting poorer.

It’s all going wrong somewhere in the middle as the tax raised isn’t doing its job.

Perhaps the answer is having professionals making tax law to raise money for defined targets instead of politicians, making ad hoc decisions to meet political agendas.

Whatever the answer, the current system is unfair to everyone and failing to meet its goals.

Published: 12 May 2008
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Property Tax Plus director Steve Sims is the author of 'Understanding and Paying Less Tax for Dummies' - packed with strategies for landlords and developers
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