one has to wonder with this type of house price stimulation is to bolster inheritance, CT and Capital Gains taxes for the Treasury
Bloody good idea if you ask me. Houses should be for people to live in, not investment vehicles to avoid paying taxes. I still fail to see why CGT is at a lower level than income tax - and not even applied to many assets that naturally appreciate but which are only available to those who are already comparatively wealthy.
Work hard, contribute to society and you pay tax. Buy a load of art or watches or classic cars and then sit on your arse doing FA watching them appreciate and you pay sod all when you flog them. Doesn't seem exactly progressive or fair to me. CGT should be on everything and at the same levels as income tax.
Not quite that simple. There is no capital gain in inflation which is why at one time we had an inflation allowance in calculating capital gains. I guess they dropped it because many people couldnt work out the simple sums involved but arguably its the only way of handling capital gains.
Having worked for British Steel, I have been dropped in the cart by Tata, who have allowed the pension scheme to collapse meaning that I am now without any protection against inflation. My pension is fixed in £. But like Hamwich I have long messed around with spreadsheets and forecasts and am reasonably confident that we will be OK barring German style runaway inflation. In saying that I am planning on inflation averaging 5% ( actual 3.3% over 30 years), dividend income averaging 2.6% ( actual 3.1%) dividend growth of 2% pa. I do not monitor my spending - at 76 I find that I dont really want to spend much anyway. My issue TBH is that whilst on the above assumptions there will be a hefty IHT bill, I cant see my way to giving yet more to the kids because of the fixed pension and the risk of runaway inflation. First duty is to make sure SWMBO is well protected.
I would disagree with Hamwich and the 5% on property. The latter has tended to march hand in hand with equities, is currently very toppy indeed ( imagine what is going to happen if interest rates rise and people once again have to pay say 7 or 8% on mortgages)
Final comment. Both Hamwich and myself will be wrong. The future is unknown and unknowable.
