CGT/CAT After Budget

[galleryman]

Does anyone have any strong views on what the likey new CAT/CGT rate will be post budget 2008? Will it increase? Could it go back towards 40% again?

Also, if you were left an inheritance last year but have not yet received it, would you be liable to the rate at the time you actually become beneficially entitled to the inheriatnce OR the rate at applying at the time of going to probate or date of death of disponer etc etc ?

 

[ubiquitous]

Why should they increase? The tax take at the moment is bad enough without killing these sources of revenue altogether.

 

[galleryman]

I'm just putting it out there as a question.
Unemployment is rising, income tax is down. Stamp Duty is significantly down. Capital expenditure is probably still going to increase marginally over last year to continute with the national development plan, albeit at a slower rate. That will be largely financed by borrowing.
The exchequer will look to increase it's tax take from somewhere.
Nobody wants a return to higher income tax rates that penalise productivity, so probably no major changes there.
So where will the extra tax come from?
Property tax, indirect taxation, a super rich tax?
I'm just asking if anyone feels that perhaps CGT/CAT may be a target.

 

[Mini3277]

Does anyone have any strong views on what the likey new CAT/CGT rate will be post budget 2008? Will it increase? Could it go back towards 40% again?

Also, if you were left an inheritance last year but have not yet received it, would you be liable to the rate at the time you actually become beneficially entitled to the inheriatnce OR the rate at applying at the time of going to probate or date of death of disponer etc etc ?

I'd agree with your opinion. I know a few companies that have gone into liquidation and have insisted on the job being completed by the date of the budget. They think the CGT rates are going to go up.

I'd tend to agree that they may increase CGT, however I imagine the increase would only be to something in the region of 25%.

I doubt CAT will increase. I imagine you'd be subject to the new CAT rates if they were to change, it's something that I'd have to look into but legislation seems to mention grant of probate.

 

[Bronte]

I don't think they will increase CGT, when it was 40% too many people were 'evading' it. When they brought it to 20% people felt it was 'reasonable' and so didn't have a problem paying it.

 

[ubiquitous]

I'm just putting it out there as a question.

I thought that was blatantly obvious from your first post?

The exchequer will look to increase it's tax take from somewhere.
Nobody wants a return to higher income tax rates that penalise productivity, so probably no major changes there.
So where will the extra tax come from?
Property tax, indirect taxation, a super rich tax?
I'm just asking if anyone feels that perhaps CGT/CAT may be a target.

But increasing CGT & CAT tax rate doesn't increase the tax rate, it decreases it as people simply are disincentivised from selling assets and making gifts.

I don't think they will increase CGT, when it was 40% too many people were 'evading' it. When they brought it to 20% people felt it was 'reasonable' and so didn't have a problem paying it.

There is no evidence of widespead CGT evasion in the years prior to McCreevy cutting the rate from 40% to 20% in 1998. The simplest way to avoid CGT is to avoid selling assets. Prior to 1998, many people sold assets only when absolutely necessary as the 40% CGT charge was a major disincentive against realising gains that would be taxable at 40%. I don't think we need to repeat the errors of that era.

 

[Bronte]

Ubi I agree with you people would decide not to sell if the tax take was 40% and I did make that point when I said people see 20% as reasonable.