Is this a pork pie from the Chancellor?

A spokeswoman for the chancellor said he had done nothing wrong and had had the arrangement approved. Darling let his flat "to cover its costs" and declared that in the register of members\’ interests, she said, adding that he paid council tax on his Downing Street residence and was taxed "on the benefit of living there".

Paying tax on the benefit of living there, eh?

I\’m not sure that\’s actually correct. I remember when Cook and Blunkett were still using grace and favour places after having resigned from the Cabinet. There was some discussion of the point that they should have to pay for the value of living there. No, not when they were a Minister, everyone agreed that they didn\’t have to do that, but when they were not a Minister, then they should.

The thing about this is that some of these grace and favour places are so valuable that no one on a Ministerial salary could afford to pay even the income tax upon the benefit.

The Foreign Secs 6 bedroom place in Carlton Terrace for example (think that\’s right). Or those apartments in Admiralty Arch. And maybe Number 11 as well.

What do you think? £10k a month about right for a rental of such a place? And paying £4 k a month income tax on such a benefit?

I don\’t see people doing it really, do you?

So why has Darling said he is?

9 comments on “Is this a pork pie from the Chancellor?

  1. No benefit in kind is payable where the revenue agrees that providing a residence is necessary to the work. Normal examples would be tied cottages, house-keepers’ flats and the like. Given the long historical association between the offices of Prime Minister and Chancellor of the Exchequer and numbers 10 and 11 Downing Street, it would be surprising these were regarded as benefits in kind.

  2. Further to what H says, there is another exemption, tailor made for PM and Chancellor* that says if you have to live there for job-related security reasons, it’s not taxable.

    * The CGT exemptions for second homes are also tailor made for MPs, click my name for more.

  3. I vaguely remember something from my school days that the Chancellor was exempt from paying taxes (maybe it was just income tax) so he wasn’t swayed by personal gains/losses when making decisions.

    I also vaguely remember some Tory Chancellor paying tax voluntarily.

    Perhaps someone knows the details, I can’t find anything on Google.

  4. Tim,

    Is there enough anecdotal tax avoidance evidence to classify the House of Commons as a “tax haven”?

    Certainly seems to be enough to qualify it as a “secrecy jurisdiction”.

  5. Worstall, you fool!

    Now you’ve given the bastard the idea he could get 10k a month for renting it out, he’ll claim his main residence is in the portalloo of Beckett’s caravan and we’ll have one of the Saudi’s living in Number 11!

  6. According to the Telegraph “In early 2007, Mr Brown transferred his London flat to his wife’s name and she took out a mortgage on the property.” What’s that about? Did he sell it to her so that he got the capital gains tax-free?

  7. He says he was taxed, not that he paid tax. I have been taxed on last year’s earnings but haven’t paid up (I will when I am required to legally though). He says he was taxed, but he might have only been taxed one pound, that wasn’t made clear.

  8. Also, whilst £10k a month might be right for the building, it probably isn’t for the personal quarters: the majority of the building is actually a huge office.

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