She was accused of changing the property she designated as her "second home" twice in one year - first claiming her Salford home was her second home, then changing it to a London flat which she sold before buying another London flat and claiming expenses on that.
It emerged that she had not paid Capital Gains Tax on the £45,000 profit she made on the sale of the London flat claiming there was "no liability" for CGT on the sale. It’s called flipping.
So can we get away without paying CGT on the sale of second homes? Can we start flipping? No because the HM Revenue & Customs have legislation in place to prevent these tax dodges. OK technically it can be done and HMRC have even issued guidance on how it can be done legitimately but there has to be a valid reason to designate a second home as your main residence. Tax avoidance is not a valid reason.
Blears said she had acted within the rules of the Commons and HMRC, but she had decided to pay the money anyway after public uproar. How honourable. Hazel, all is forgiven.
“What's really important to me is what people think about this issue and what people think about me”
Clearly not! What would happen if you or I “omitted” to pay tax? Well, we would have to pay the tax, just like Hazel. Then HMRC would apply penalties, which could be as much as 100% of the tax outstanding and on top of that interest would be charged, very expensive. Finally just to rub salt into the wounds Mr Darling announced in the budget that HMRC would name and shame those of us who fail to pay tax (admittedly when the tax exceeds £25,000).
So come on Blears, if it’s that important to you, do what the taxpaying voters do and pay the rest.
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