Jeff Prestridge  

Plan through blue and red

Jeff Prestridge

Jeff Prestridge

Although George Osborne’s changes to the taxation of buy-to-let landlords in 2015 have been much criticised, such criticism will pale into insignificance against the wailing that would greet Mr McDonnell if he were to go ahead with the proposals outlined in Land For The Many.

He would kill the buy-to-let market – which is probably what he would like to do.

There is an even scarier suggestion discussed in the report with regards to home ownership.

It talks about the possibility of CGT being applied to all home sales (main homes as well as second homes) arguing it would “allow us [Labour] to limit the wealth inequality arising from the housing boom”. 

A horrifying prospect that would probably bring the housing market to a shuddering halt – and cause a stiff correction in house prices.

As for inherited wealth and its taxation – the biggest concern among clients of advisers according to Royal London – Land For The Many recommends sweeping reform.

It believes a future Labour government should do away with the current IHT threshold, which stands at a maximum £475,000.

It would be replaced with a lifetime gifts tax, meaning anyone inheriting more than its suggested £125,000 maximum would pay income tax on the surplus.

The report states that this change would raise £9bn more in the tax year commencing April 6 2020 than under the current IHT regime.

Of course, IHT is not perfect. The Office of Tax Simplification has acknowledged this by recently making some sensible suggestions that would simplify exemptions (through an all-embracing personal gifts allowance) – and reduce the time that lifetime gifts are subject to IHT from seven to five years.

But the office’s good work will count for nothing if Corbyn gets into power and the recommendations in Land For The Many are introduced.

Frightening as some of this is, planners should do what they are always brilliant at. 

Reassuring clients and protecting their best interests at all times – irrespective of whether the colour of government is blue or red. Plan, plan and plan some more.

Jeff Prestridge is personal finance editor of the Mail on Sunday