There have been serious questions over MPs paying capital gains tax – or otherwise- in the wake of the expenses revelations.
Their defence has been that individuals can decided which of their homes are “first” or “second”, and this doesn’t have to tally with what they tell the Commons’ officials.
It does raise questions over how easily everyone else can escape CGT. For example, if I sell my so-called “main home”, which is in another city (and is actually a buy-to-let, for argument’s sake) then I am by definition living in my second home. But surely after a certain period – a year, five years, 10 years – then why can’t I redefine the place I live as my main home? This seems like a strange grey area.
My colleague Matthew Vincent (our personal finance editor) has predicted that a crackdown on CGT could well be in the offing for everyone.
So how tough is HM Revenue & Customs at the moment?
Today I asked them how many people they fined last year for non-payment of CGT, whether on second homes or elsewhere.
They don’t keep a record of this. Or if they do, they aren’t sharing. However, HMRC said that they collected £59.7m (of fines, owed money and interest) in 2007-8. The figure is buried in this chart on page 43.
Jim Pickard
Kiran Stacey