The news has been saturated recently with the revelation of MP's expenses, and quite rightly so. They've been very naughty boys and girls.
But now there has been the sacking by Gordon Brown of Kitty Ussher for 'flipping' her private residences for tax purposes in order to maximise her capital gains tax exemptions. The Smart Frog thinks that this is a step too far and completely unnecessary.
There is an important difference here. MP's have blatantly abused their internal rules for their own financial benefit. The rule which allows an individual, any individual, to elect to treat one residence over another as his or her home for capital gains tax purposes is simply part of this great country's tax laws, and surely each and every one of us is entitled to arrange our tax affairs as efficiently as possible. For the head of our Government - the guys who approve these laws - to get rid of a member of his staff for legitimately benefitting from those rules is quite simply wrong.
It's like saying that Joe, the self-employed plumber, can't claim for the use of his van. Or like Sir Green can't claim to be not resident in the UK. All are simply arranging their tax affairs in as tax efficient manner as possible, within the letter of the law, and so why should one lose her job because of it?
Coincidentally, the Smart Frog is currently advising a client on the same issue. The advice will be taken or not taken, but nonetheless he would be remiss not to give it, because that's what he's paid for. To criticise an MP for taking very good, sound advice from her accountant is simply not on. Would Joe or Sir Green ignore the advice of their accountant if it was going to save them heaps of tax. One thinks not - yet one suspects that they were nodding their heads with approval upon hearing the unfortunate fate of Ms Ussher.
The practice of flipping one's properties in order to optimise one's tax position has been around for years and years. It's taking it a bit flippin' far when one can lose one's job over it.
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