Sir, - Both Bacon reports omitted an important recommendation which I suggest should be incorporated in the Finance Act, 1999, viz., a charge to capital gains tax on that part of the proceeds of sale of a private residence that exceeds a stated threshold. This should be chargeable whether or not the proceeds (or any part of the proceeds) are used to purchase a new residence costing either more or less than the residence disposed of. I suggest the threshold should at present be £250,000. The charge to CGT might perhaps be subject to the proviso that where the disposal is made by a disponer who is 65 or older, the CGT would not be payable until after the disponer's death, provided 25 per cent of the CGT payable is lodged permanently to a special "pension" type account and the CGT payable is a charge on the disponer's estate and on any house(s) owned by the disponer between the date of disposal and the date of the disponer's death.
The enactment of that CGT provision would probably, at least to some extent, stabilise the spiralling costs of up-market housing arising from pure "trading up" and (more importantly) it would be equitable. I find support for my suggestion from the fact that a similar equitable provision is to be incorporated in the Finance Act 1999 limiting "net relevant earnings" for the purposes of retirement annuities to £200,000 a year. - Yours, etc., Vincent Shannon,
Brewery Road, Stillorgan, Co Dublin.