Wednesday, 10 October 2007


In 1662 a Hearth Tax was introduced in this country. It was repealed in 1688 but in 1696 a Window Tax quickly followed. Fortunately, and despite the best efforts of Henry VIII in the previous century, divorce still hadn’t really caught on. Were such to be in force today the Treasury coffers would no doubt be overflowing as one household becomes two and windows and fireplaces double.

Lawyers are often accused of being parasitic in nature, there always being a need for one when life goes wrong, be it at a time of personal injury, divorce or death. The only other thing you can be sure of is that the Taxman is never far behind; clawing back income tax on specific types of compensation payments, collecting inheritance tax on death and of course rubbing his hands in glee when family assets are realised in divorce proceedings with the potential for a capital gain and yet more tax.

Am I just being cynical or was yesterday’s announcement by the Chancellor a big con? Is a flat rate of Capital Gains Tax at 18% with no indexation or taper relief really just a means to simplify matters (so that solicitors can undertake the calculation and give the client the bad news before the Inland Revenue)? Does nobody else out there think it could be a tax on inflation? Isn’t that immoral when it’s invariably government policy that causes inflation in the first place? Did the Chancellor consider the effect on divorcing couples and their need to realise often long-held assets immediately to create two homes, with little scope to stagger the sale of shares, businesses or second homes over two or more tax years? I bet he didn’t. Why doesn’t he just bring back the Window and Hearth Taxes; at least that way I could advise clients to go and live in potting sheds?

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