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Lib Dems float mansion ‘super tax’ plans

The Liberal Democrats are looking at proposing a mansion “super tax” which would see their mansion tax plans extended to hit multiple properties including second homes and buy-to-let properties worth a total of over £2m.

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The Sunday Times and the Mail on Sunday report the Lib Dems have drawn up a taxation policy consultation which proposes extending an annual 1 per cent levy on property portfolios worth more than £2m.

The policy document will form the basis of the Lib Dems manifesto on tax for the next election, and is said to have been prepared by senior Lib Dems including Nick Clegg’s chief economic adviser Chris Saunders and former banker and education minister David Laws.

Last week, Labour backed the introduction of a mansion tax in order to help fund the reintroduction of the 10p income tax band.

Other plans outlined by the Lib Dems include tougher rules on inheritance tax which would see the taxation of gifts to family and friends within 15 years of death, rather than seven. The consultation also proposes that employers’ pension contributions should be subject to national insurance, and a new “French-style” tax on assets such as paintings and jewellery.

The Lib Dems have also suggested helping first-time buyers save for a deposit by reducing the amount of income tax they pay.

The Sunday Times reports business secretary Vince Cable has backed the plans, but in an interview with Sky News Cable said smoe of the proposals were “wacky”.

Cable told Sky: “There is a working group coming up with ideas on a wide variety of things … some of their ideas are interesting, a couple of them are a bit wacky – the idea of taxing jewellery is completely impractical and intrusive.

“The idea that you combine together people’s properties, probably does not make a great deal of sense because people’s second homes are already subject to capital gains tax, income tax on the rent.

“So there are ideas in there that I am sure will not get any further, but we have a democratic process, we have activists who come forward with ideas, we debate them and then we make policy – but we are a long, long way from that.”

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