More On Tax Planningfrom The Advisor's Professional Library
- IRAs: In General Individual Retirement Accounts are highly popular tools for contributing funds that grow on a tax deferred basis. Depending on the type of IRA, the accumulation can be tax free.
- Annuities: Variable Annuities Annuities are hot. The tax rules vary with the circumstances. Advisors must be aware of these intricacies when discussing annuities with clients.
Britain’s deputy prime minister called for an increase in taxes on capital gains and on the priciest real estate transactions, saying it was harder for the wealthy to avoid taxes on assets they couldn’t just pick up and move.
Bloomberg reported Monday that Liberal Democrat Nick Clegg called for the government to increase revenues via higher taxes on capital gains and on the pricey residences of the wealthy instead of through cuts in welfare.
“Most people in this country don’t understand why people who have very high-value property don’t pay their fair share,” he said in the report. “It’s easier to stop tax avoidance on bricks and mortar than on money you can move around the world.”
While Clegg is trying to bolster support for his party, which has been falling in the polls, his stance risks a resumption of hostilities with Conservatives, many of whom are calling for cuts in welfare rather than higher taxes on the wealthy to pad the government’s bottom line.
Clegg himself lost support and drove his party’s ratings down back in the March budget, by supporting a cut in the top income tax rate without also insisting on a “mansion tax” that Liberal Democrats had insisted must also be pushed through. Now he is outspoken in his approval of the latter measure.
He was quoted saying, “I believe in a mansion tax. I can’t for the life of me understand why anyone thinks it’s okay that if you’re an oligarch in a 3-million-pound ($5 million) house in the middle of London you pay the same council tax as the family next door.”
Clegg is not the only Liberal Democrat to support stronger measures to gain revenue from Britain’s wealthiest citizens. Liberal Democrat Business Secretary Vince Cable was quoted saying, “There’s a continuing lingering sense of resentment that people have, that at a time when real incomes are squeezed hard, some people who ought to be paying their share are managing to get round it.”
Treasury Chief Secretary Danny Alexander, a Liberal Democrat, said that the coalition government is cracking down on tax avoidance by the wealthiest. Among the measures he cited in a recent Mail on Sunday interview are a closer look at those who hold assets of more than a million pounds; a halt on tax avoidance strategies by the highest-paid British Broadcasting Corp. executives; and fines of as much as 100,000 pounds on soccer players and managers who slip through the taxman’s net.
The party is trying to make up lost ground for a broken campaign promise not to raise university tuition fees—something that cost them dearly.