Even more questions for David Cunliffe on his Capital Gains Tax, from Jamie Whyte:
Exempting the family home from Capital Gains taxes is harder than it sounds. What if you charge one of the children board? What if it is one of the children’s friends? A boarder? Many South Auckland families share a house. When does it stop being a family house? If you take a job overseas or elsewhere and rent the home for a while, is it still a family home? What about the Granny flat? What if it is not granny?
Labour’s proposal is not fair. The million dollar Dotcom mansions will be capital tax free and the Otara ex-state house will be taxed because the owner needed extra income to pay the mortgage.
Davids Cunliffe and Parker have not thought through their stupid tax.
8 comments:
New Zealand is supposed to be a capitalist democracy. Therefore Labour and parties like it should be constitutionally precluded from election. Obviously the Greens, NZF, Internet & Mana should be similarly precluded.
The interesting question is National - any objective analysis of their record in government for the last six years would require them to be precluded also.
haha nice to see Jamie reads the famous lolitasbrother and paulscott. we hit them hard today.
more later dude
CGT
I proposed on kiwiblog , and the Standard [ yes the standard] that
where is the starting price, don't tell me 1987 when my dad bought this home,
who decides this, don't give me QV rate value that is trash and challenged,
what happens if my husband walks out on me get an new home with woman,
what happens if i leave my home run away and give to daughter
what happens when we talk about the cunliffe trust
i will take the liberty of posting my articles below, I do not mean to dominate but this is bloody real.
CGT
I am not accountant or lawyer.
I do not know how they get on in Australia and other places with CGT, but here in NZ it could be a costly nightmare to administer. And it could return poorly.
Some people say so costly that it is better to have a threshold , lets say $500,000, before tax sets in on home properties..
But then in New Zealand this would mean that Auckland, and North Island city people would pay all the capital gains tax. This is how it should be of course.
Here are some difficulties
1. What is the starting point cost of the asset. You can’t go back to 1986 for a family who have been in that home all along.
2. How do you value it. Rateable value is very flimsy, and challengeable
3. If family will be exempt, who is family. If we have a joint tenancy, or in common, who pays the piper if the couple split up. Is a daughter family in this case, even if not on title deed
4. What if the owners of the family home , leave after a while and rent out for a couple of years before sale.
5. What if you do capital improvements to the home
6. What if you add in your own family costs of labour for improvements
Exemptions
Any tax with exemption is a minefield, and I think that is why they were so hard line in GST.
except for personal sales, [ home ] and financial transactions. Can you see the lawyers and the
Accountants ready to vote Labour . .
Well we haven’t even started on family Trusts yet [ like Mr Cunliffe home ]
and maybe I leave that for another post.
Cunliffe could not really answer the PM on this issue, because he would be down the mine with methane, more later, next post ,
where’s Michael Cullen when you need him
Repeat I have no professional expertise just reading up over many years ,
CGT and Family Trusts, and the David Cunliffe Family Trust
Family Trusts are quite straight forward in requirement.
A Settlor gives assets to Trustees who hold it in Trust for Beneficiary. These things must be proper and true
The trouble was that the business of actually gifting the asset was so complicated , and the deeds and so on, that everyone went to lawyers and Accountants.
These people then contrived incredible things like double blind trusts and basically :
• The Asset had not properly been given away
• The costs were enormous and
• the trustees did nothing
• the Trust was invalid, and
• The legal and accountancy profession people were often incompetent in this regard
Now the previous Labour Government worked with IRD to tighten things up, and make Trusts less attractive. And they succeeded . Try filling in your IR5 or whatever it is ,and you are going to sweat.
It was a good move by Labour, Trusts are stupid, and antiquated nonsense and it took me five years to see what was happening.
Each year the forms got more difficult . I think the tax rate is about 35% , which to a high income earner may be OK .My Family trust is not worth a tinkers arse..
Labour quite properly wanted to get people back to basics again.
Are you with me so far
But the voting block of people with Trusts is now not just Nat voters. Many hard working New Zealanders took this expensive course in the belief it would benefit their children, and that their assets would not be taxed, or taken from them.
That was the fundamental value for the sacrifice these parents wanted.
Now lets put the flame torch down the methane mine.
Will you tell us here Mr Cunliffe that you with your safe trust will now collapse the value of ordinary New Zealanders family Trusts . And if so why? And if so how?
they backed down today, punch in face , more to come
With all these taxes, how can a family accumulate wealth so that it can look after its members' health, education and welfare?
This is not about seeking fairness or making more revenue for government. It is about grinding people between the millstones of taxation and inflation. It is about making them dependent and servile. Now get out there, partake, grant legitamacy to authority and vote.
Amit
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