Christmas Quiz  - Another taxing problem

These are some property related taxes over the last 40 years, some of these have been introduced, fizzled and disappeared others are still with us. Which is the odd one out?

IHT, CGT, BL, ED, SDLT, PGS, DLT, CTT, VAT, CLT, SD.

The answer PGS or planning gain supplement because it hasn’t been introduced – yet. As with its predecessor Development Land Tax which the author did have a working knowledge- just,  it seeks to tax the gain on development value as a result of planning permission. Quite a laudable idea you may think since this is to pay for the local infrastructure to support the development and be a catalyst for further improvement.

The Problem

This is that invariably the detail of the operation is not known, it stifles development as it cuts into profit before a developer can sell on and at the very least seriously affects cash flow. More likely it means that re-development does not take place especially in poorer, marginal locations.

The “de minimus situation” the affect of interaction with other taxes and the sheer complexity of it all may well be a feature particularly if earlier versions of a development related tax is to go by.

Opportunities

Accountants of course should be aware of all taxes that affect property to be able to advise their clients about land transactions and the affect of any increase in market value as a result of planning permission.

Valuation surveyors can give advice on statutory valuations for taxes, particularly with our experience working in the District Valuer’s Office during the 1980’s. Future letters will concentrate on other taxes with which we are involved in our expertise.

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Good that just about wraps it up for this year. Of course you can break away from your festive cheer to work out the other property taxes listed above but we expect that you will be busy on your client’s tax returns!

Season’s greetings and best wishes for 2007!

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This is part of a regular series of topical articles provided exclusively by RDN Chartered Surveyors. If you would like further information or add your comments please reply to this e mail or contact Roger Nelson on 0800 902 0466