MPs' expenses: George Osborne 'must be made to pay' say Lib Dems
George Osborne, the shadow chancellor, is facing demands to “pay back” £55,000 in capital gains tax, which critics say he is morally obliged to pay after “flipping” his designated second property.
The Liberal Democrats said they had calculated how much capital gains tax Mr Osborne avoided by the way he designated his London family home. They called on David Cameron to force him to pay it back.
The Tory leader has clamped down heavily on backbench Tory MPs who have abused the expenses system, but he has yet to censure a senior member of his inner circle.
Shortly before Mr Osborne entered Parliament in 2001, he bought a large farmhouse in his Tatton constituency. Instead of taking out a mortgage on it he increased the mortgage on the London property to pay for his new home. When he had been elected an MP, he designated his London property as his second home with the House of Commons fees office, allowing him to claim back on his additional costs allowance the interest on the portion of the mortgage representing the farmhouse.
Two years later, Mr Osborne took out a separate £450,000 mortgage on the farmhouse and flipped his second home designation, enabling him to claim those mortgage interest payments on his ACA. Since then he has claimed up to £100,000 in mortgage interest payments for the farmhouse mortgage. During this whole period, Mr Osborne told the Inland Revenue that his primary residence for tax purposes was his London home.
In 2006, Mr Osborne sold his London home for £1.48?million, making a £748,000 profit. Because it had been declared for tax purposes as his primary residence since he bought it in 1998, he did not have to pay capital gains tax.
The Liberal Democrats argue that Mr Osborne should pay £54,948 in capital gains tax, which they say he should have been under a moral obligation to pay had he told the tax authorities that for two of the eight years he lived in his London home it was designated as his second residence. They base their calculation on the claim that under the spirit of the rules, Mr Osborne should be liable for capital gains tax on a quarter of the gain of his house sale profit.
Lord Oakeshott of Seagrove Bay, the Liberal Democrat Treasury spokesman, said: “This is a real test of Mr Cameron’s leadership. He blackballed his country gentlemen with their moats and duck houses before their feet could touch the ground. But will he make his shadow chancellor pay back this tax?’’
A spokesman for Mr Osborne said the designation of his second home was made on the advice of the Commons’ authorities. He added: “George has never switched designation for personal advantage. There has been absolutely no impropriety and any suggestion of such is wrong.’’
The Telegraph
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A good example of why I keep saying all they are doing is paying lip service to stopping these sort of loopholes in the system
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Re: MPs' expenses: George Osborne 'must be made to pay' say Lib Dems
Originally Posted by Bald Bouncer
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