Streeting targets landlords with Wealth Tax plan
Labour leadership hopeful Wes Streeting unveils his policy proposal of a tax that would hit property owners.
Labour leadership hopeful Wes Streeting is calling for a Wealth Tax that would target landlords.
In his pitch for the top job of Prime Minister to replace Keir Starmer, Streeting says it is unfair that tenants pay more tax than their landlords.
Streeting claims it is wrong that Income Tax rates are higher than for Capital Gains Tax, as it ‘penalises work’.
Tenant v landlord
In an interview with the BBC’s Political Thinking podcast, he talked about a tenant in Lancashire and compared her situation with her landlord.
“She slogs her guts out, he puts in far less effort, yet the state rewards him more than her. And we wonder why people are angry,” he said.
“The system is penalising work. It’s not fair and it’s bad for our economy. We need a wealth tax that works. A pound made from simply owning assets should not be taxed less than a pound made from a hard day’s work.”
Raise £12billion
Under Streeting’s proposals, Capital Gains Tax rates would reflect the three bands of Income Tax of 20%, 40% and 45%, The Guardian reports.
Streeting told podcast presenter Nick Robinson that his plan could raise up to £12billion a year.
Last year, former Labour leader Lord Kinnock urged Chancellor Rachel Reeves to introduce a Wealth Tax in her Budget.
Reeves rejected the proposal of a tax on assets above £10million because wealthy people could easily move their money abroad. But she did raise the amount landlords have to pay, with 22% in income tax (up from 20%) on rental income, and 42% and 47% at higher rates.
Main picture: BBC News
If you want to make CGT level with income tax give a nil band of £12570 per year of ownership of the asset.
More tax, less investment, less revenue.
Government are not going to get a penny of CGT from me as my children don’t need any of my property, nor do they want the hassle. So I plan to transfer most or all of it to a charity or create my own and maybe put one of my children in charge if they want to work for a paid position.
Whether this is mainly positioning by Streeting to compete with Rayner and Burnham, but he has really let himself down here.
40-45% tax for property capital gains is utterly ridiculous. He’s completely failing to recognise that investors are taking risks when they invest or enhance an asset, and historically it’s been accepted that business owners should be rewarded for taking on risk with their own capital rather than just sitting as an employee for life. He is comparing apples with pears when he claims income tax and capital gains tax are the same thing.
This is going to have a massive dampening impact on BTL investment. Why would anyone bother going to all the effort of investing and enhancing your assets when you have a guaranteed theft of 40-45% by the Government at the end, on top of zero inflation-proofing and a piffling £3000 personal tax-free allowance for CGT? Small property investors and business owners in particular would do far better just to stick their money in the stock market via ISAs and SIPPs and get tax-free capital gains for life.