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Coalition government: middle classes to pay to fund cuts
Middle-class Britons face sharp increases in tax under the compromise deal agreed by David Cameron to secure Liberal Democrat support.
By Robert Winnett, Deputy Political Editor
Published: 11:57PM BST 12 May 2010
New taxes for higher earners introduced by Labour now look set to become permanent Photo: REUTERS
Within weeks, George Osborne, the new Chancellor, is expected to set out plans for a rise in capital gains tax on the sale of second homes, buy-to-let properties, shares and other investments. Many people rely on these to fund their retirements.
The tax could more than double from the current 18 per cent in a move that will affect hundreds of thousands of Britons. Last night, estate agents reported a surge in people seeking to sell properties as details emerged.
The Conservatives have also been forced to abandon plans to scrap inheritance tax for everyone except millionaires. It now has little chance of being introduced before 2015.
The Lib Dems will not be forced to support Tory plans to offer tax breaks to married couples. Although the policy can still be introduced by Mr Cameron, it was not clear whether it will still happen next year.
New taxes for higher earners introduced by Labour — including the 50p higher rate of income tax — now look set to become permanent.
They are necessary to fund a key Lib Dem policy to ensure no one earning less than £10,000 pays income tax. This policy – now a long-term commitment – will cost £17 billion a year.
There will be rises in the allowance at which income tax becomes payable. The Government will also push ahead with plans to increase National Insurance contributions for workers, but not employers.
However, the Treasury insisted that basic-rate taxpayers will not be worse off as they would be compensated with income tax cuts.
There are an estimated one million buy-to-let properties and more than 200,000 second homes that will attract the new capital gains tax rate.
Middle-class Britons face sharp increases in tax under the compromise deal agreed by David Cameron to secure Liberal Democrat support.
By Robert Winnett, Deputy Political Editor
Published: 11:57PM BST 12 May 2010
Within weeks, George Osborne, the new Chancellor, is expected to set out plans for a rise in capital gains tax on the sale of second homes, buy-to-let properties, shares and other investments. Many people rely on these to fund their retirements.
The tax could more than double from the current 18 per cent in a move that will affect hundreds of thousands of Britons. Last night, estate agents reported a surge in people seeking to sell properties as details emerged.
The Conservatives have also been forced to abandon plans to scrap inheritance tax for everyone except millionaires. It now has little chance of being introduced before 2015.
The Lib Dems will not be forced to support Tory plans to offer tax breaks to married couples. Although the policy can still be introduced by Mr Cameron, it was not clear whether it will still happen next year.
New taxes for higher earners introduced by Labour — including the 50p higher rate of income tax — now look set to become permanent.
They are necessary to fund a key Lib Dem policy to ensure no one earning less than £10,000 pays income tax. This policy – now a long-term commitment – will cost £17 billion a year.
There will be rises in the allowance at which income tax becomes payable. The Government will also push ahead with plans to increase National Insurance contributions for workers, but not employers.
However, the Treasury insisted that basic-rate taxpayers will not be worse off as they would be compensated with income tax cuts.
There are an estimated one million buy-to-let properties and more than 200,000 second homes that will attract the new capital gains tax rate.