Emergency Budget: Capital Gains Tax to rise

John_Pierpoint

CG70295 - Land: disposal of interest in land

TCGA92/S22 (1( (d)

The decision in Chaloner v Pellipar Investments Ltd (TCB7/96) distinguishes disposals of an interest in land that fall within TCGA92/S22 (1) (particularly capital sums received for the use or exploitation of assets, see CG12945) from those that do not. The importance of the distinction is that the time of a disposal that falls within Section 22(1) is given by Section 22(2) as the time at which any capital sum is received, see CG12941. The time of most other disposals is given by TCGA92/S28 as the time at which an unconditional contract for the disposal is entered into, see CG14261+.

Disposals in which the owner's title to the land is affected, for example by the grant of a lease, do not fall within Section 22(1). Disposals in which the owner's title is not affected, for example the grant of a licence, a profit or an easement, do fall within Section 22(1).


An accountant/lawyer explains the opportunity this presents:


http://www.butler-co.co.uk/articles/Gravel%20Money.pdf

(This article is an exploration of the question "Do I pay Income Tax, Normal CGT or Business rate CGT? based on "I find there is gravel under one of my fields?").The above HMRC quote covers: The water company approaches me with a proposal to put a sewer through my field; what is the tax point date? Answer: When you get the money! Why? Because you have not changed the title to the land.)

uk1

JamesU wrote: »

Yes, it was mentioned on Newsnight last night that the budget proposals were agreed and have gone through.

JamesU

In terms of activities that people might want to take in the future, I think that once the coalition honeymoon is really over - the barometer of that will be Simon Hughes to an extent - then I think a few decent stories in the press will re-kick start the topic. Once Hughes becomes all mouthy, he will set off the Conservative back-benchers many of whom aren't as well-balanced and sensible as Redwood and in particular those who are in margnials who feel that their core vote has been put at risk by the coalition agreement. They have had their first taste of Westminster and won't want to give that up for a proper job. Many of them are from marginals and it will often be the elderly many of them with long-term investments who are livid at the treachery and who helped the Conservative MP over the finishing line and they will not want to lose their seat. Promises will be sought. Electoral reform and boundary changes are going to be a bit of help but in the end it's the elderly that actually go out to vote and will be the key group for many new Conservative MP's in the next elelction.

The other event that may start a change is still possibly Vince Cable. To me he looks like a broken man who was much happier in his previous role of national treasure and trustworthy and knowledgeable guru. "You can always trust Vince to make sense and speak the truth". Just look at his eyes the next time you see him.

To me he looks haunted and very deeply unhappy by the concessions he has had to make. He looks like he is deeply uncomfortable with the questions constantly asked of him. At one stage he was receiving daily pep calls from his leader to keep him on-side. Did he give up his Lib Dem role to Hughes in part to ensure that a heavy handed uncompromising voice hung over the government?

It will be the budget after next followed by the next set of manifestos that will be the next two big opportunities for a bit of lobbying. Or there could be a sudden change in the press who all focus on inequity if the government bottle out of public sector pensions and pay whilst stuffing pensioners.

Anyway I guess those are my final musings on what has been an emotive and interesting topic.

Hotscot

JamesU wrote: »

For info, I have just come across this link here which is a letter from MP John Redwood to HM Treasury with views on CGT, dated 26th May 2010. It is quite remarkable and sums up a lot of what has been discussed on the thread:

http://www.johnredwoodsdiary.com/?p=6322

Catching up after a 500 mile drive ! Thanks for this link JamesU. I wasn't aware of its existence & I'm sorry I hadn't read JR's letter (the content of which I strongly support) sooner.

It seems from this and later comments since posted here, that the Government won't budge now on this inexcusable attack on basic rate taxpayers who also happen to have been long-term investors. As uk1 and others have been saying, there is probably no point "flogging a dead horse" any more. At least, not on this Forum. But once they are aware of what has happened, many life-long Conservative supporters will be making sure at every possible opportunity that their MPs know what they feel about the Government's skulduggery. This fight has only just begun and I'm grateful to all here who have helped clarify the issues better. I just wish more "elderly" folk would use this Forum! Cheers. :money:

Hotscot

00ec25 wrote: »

isn't the default requirement in most contracts that it is "vacant possession" and thus surely this is a conditional contract as the condtion is not met until completion when vacant possession is fulfilled?

so the date is the completion not the exchange date for most house purchases?

Just a brief reminder that the property laws in Scotland are significantly different from those of England and Wales. In general, when an offer to buy (in writing) is accepted (in writing), that is the point at which a formal contract comes into existence between the parties, irrespective of when other formalities are completed and payment made. It's more like the irrevocable commitment to buy (or sell) shares once your broker has acted on your behalf and you can be sued if you ultimately fail to pay the agreed amount. It works well, most of the time. "Exchanges of Missives" are usually between solicitors.

TM1976

uk1 wrote: »

Anyway I guess those are my final musings on what has been an emotive and interesting topic.

At last something we can be thankful for.
This board is a great source of free advice for tax information for those who have real problems and concerns about tax. Having looked at your history I can see that you have not provided any of this, you have however in the course of this thread been rude and dismissive to myself and a number of posters who regularly do provide useful advice, and were attempting to do so.
Let’s hope that they continue to contribute and be treated with the level of respect that is usually the norm on this forum. Thanks to everyone else for their posts.

uk1

TM1976 wrote: »

At last something we can be thankful for.
This board is a great source of free advice for tax information for those who have real problems and concerns about tax. Having looked at your history I can see that you have not provided any of this, you have however in the course of this thread been rude and dismissive to myself and a number of posters who regularly do provide useful advice, and were attempting to do so.
Let’s hope that they continue to contribute and be treated with the level of respect that is usually the norm on this forum. Thanks to everyone else for their posts.

Kettle and black.

A totally unnecessary post.

And I have re-read your history. I treated everyone who treated me with respect exactly the same. When I was treated disrespectfully or rude or in a dismissive way I corrected - but then when the rudeness continued I returned the compliment. Posting your last comments above rather proves my point.

Pretty much every negative exchange with you and the one other was caused by you basic inability to read a post and/or understand it or was as a result of a mis-conceived presumption about me. This is not your thiefdom - you do not own it and have no greater right to be here than me irrespective of what you clearly think about your own importance.

As it happens I'm not clear how you have concluded that your posts were appreciated any more than mine so perhaps you are halucinating again.

JamesU

Hotscot wrote: »

It seems from this and later comments since posted here, that the Government won't budge now on this inexcusable attack on basic rate taxpayers who also happen to have been long-term investors. As uk1 and others have been saying, there is probably no point "flogging a dead horse" any more.

Agreed. I am sure there will be plenty of CGT threads covering many classes of assets in due course. But the generic points and implications have been covered. And a useful opportunity to vent frustration on thread regarding the proposterous nature of the budgetary CGT changes.

JamesU

JamesU

uk1 wrote: »

Anyway I guess those are my final musings on what has been an emotive and interesting topic.

UK1, Thanks for the informative discussions. Although I tend to be reasonably on board with taxation rules and their implications, I have to admit that I am worlds away from comprehending how politicians interact and impliment policies. So a breath of fresh air with the input on posts from your side.

I guess one aspect of a coalition government is the need to compromise on policy. These budgetary CGT changes appear to be a perfect example of that, leading to an ineffective solution which fails to meet its objectives, and also prejudices those who were not intended to be the focus. Terrible mess. Appraising John Redwood's views and input on CGT was a personal matter rather than obsessive scrutiny over the CGT changes. Based on his letter to the Treasury, he is still an MP with sound understanding, reasoning and integrity. That counts for a lot these days. Enough said now.

JamesU

uk1

JamesU

Thanks for the kind comments - appreciated.

In re-reading my note I hadn't intended to dissaude you from lobbying, rather just to increase the volume control when thesituation looks more favourable.

The wider issue of MP's and how they behave is fascinating and perpelexing. A friend who I have known since we were teenagers has just left Parliament under a cloud due to the expenses scandal. He is well known for his extraordinary work, particularly on 20th century slavery. Although he has had the most altruistic life, it has ended with the most apalling misjudgements because Westminster basically effects their brains. Anyway ... that is a completely different topic.:D

In the end there will be some taper relief or indexation - it's a matter of time. The noise will get greater and so will the pressure. Most people affected will simply wait.

Have a good day and thanks again.

JamesU

uk1 wrote: »

JamesU
In re-reading my note I hadn't intended to dissaude you from lobbying, rather just to increase the volume control when thesituation looks more favourable.

In the end there will be some taper relief or indexation - it's a matter of time. The noise will get greater and so will the pressure. Most people affected will simply wait.[ /QUOTE]

Not to worry, you have not dissauded me from lobbying, but to be honest I have no enthusiasm for this.

If inept decisions are made as at present, I have no time or inclination to wait for them to be reversed. Politicians are elected and paid to provide a service. If they manage to deliver collectively in an appropriate manner that is great. If they do not, I will of course help to vote them out in due course. Pretty simplistic approach but it suits me well.

JamesU