CGT-dodging ex-minister favours CGT over 50p rate

A former Labour Treasury minister today urged her party to drop its support for the 50p tax rate.

Kitty Ussher, writing in the Wall Street Journal today, urged Labour to drop its support for the 50p rate and replace it with more tax on pension saving and capital gains tax (CGT) on principal homes.

Ussher was forced to resign as Treasury minister in 2009 at the height of the expenses scandal when the Telegraph revealed she had dodged paying £17,000 in CGT on the sale of her home.

The minister told tax authorities in 2007 her principal home was her constituency house in Burnley, enabling her to avoid CGT on its sale, when in fact her principal home was her South London residence.

In a letter in the Financial Times yesterday 20 economists urged the government to drop the totemic tax rate, claiming it would drive economic growth.

But Downing Street today dismissed the economists' concerns the tax will be dropped as soon as possible.

However, the government said the tax is only a temporary measure.