Azara Blog: Robert Peston cannot cope with criticism

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Date published: 2010/06/07

Robert Peston write on his BBC blog about "the coalition's commitment to equalise the rate of capital gains tax with income tax capital gains":

What I am really interested in is the effect on the housing market.

Because it is the uncertainty about what's going to happen that's doing the real damage.
If the uncertainty persists about when the new higher rate will be introduced, the negative effect on house prices could be much greater.

Because for those sitting on significant capital gains above the tax free rate of £10,100, it becomes rational to flog properties pronto - to take advantage of the 18% rate and avoid a tax rate that looks set for most property investors to rise to more than double that.

In a housing market that is still weak, a wave of panicky sales could push down prices in a significant way.

This is an incredibly naive, and one could say damaging, article for a BBC business editor to write, because it completely ignores indexation. Peston's blog allows comments, and the following comment was made:

Robert Peston has unbelievably completely ignored the issue of inflation indexation in the calculation of CGT. Although the 18% figures looks lower than the 40%/50% figure, the former ignores inflation and so makes the CG artificially bigger the longer you hold the asset. If the LibCon government re-introduces the CGT rate being the same as the income tax rate (fair enough, since CG can be thought of as deferred income) then I am assured by my LibDem MP that indexation will also be re-introduced. Of course the devil is in the detail, but it seems to me that Robert Peston is not doing his job, he should be asking his (far better) sources about indexation and reporting back to us, rather than these kind of half-baked stories.

Apparently, after being posted on the BBC website for over a week, either Peston or one of his flunkies took exception to someone pointing out how bad his article was, and the comment was removed, for allegedly being against the BBC's House Rules.

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