On the idea that you only own something if you’ve paid tax on it

This is Ritchie’s latest idea about how the State really owns everything. That you only actually gain property rights if you’ve paid the correct tax on it.

It’s piffle, of course, but the aim is always to work out why he’s spouting piffle.

So, imagine that you own the most expensive house in Downham Market. You fail to pay the tax due. Perhaps the Land Registry fee, maybe council tax. Some tax that applies to that property. Does HMRC then confiscate the property? No, they don’t actually.

They might, possibly, pursue you so far that you end up having to sell the house. Or push you into bankruptcy for not paying your tax bill so that the administrator sells your house to pay the tax bill.

Let’s say the bill is £1,000 and the house sells for £200,000.

What happens to the £199,000?

Well, actually, it goes to you. Minus the costs of the whole process presumably. But the balance after you’ve paid that tax debt is indeed still your property. And the courts, HMRC, the government, everyone, is very clear indeed upon this point. Even if you are being dunned for the tax due your property is still your property: that is, the system expressly insists that property rights are independent of your tax status.

You can indeed be forced to sell “property” in order to pay a tax bill. But you will never have your right to that property confiscated for non-payment of tax. Therefore property rights do not depend upon having paid tax.

QED.

19 thoughts on “On the idea that you only own something if you’ve paid tax on it”

  1. Food attracts no VAT. Does that mean I don’t own the contents of my fridge?

    Unsupportable nonsense, as even a moment’s reflection would show. Shame that it didn’t get any at all.

  2. Say I have a mortgage, but the local council slaps a £50,000 one-off tax on all home-owners. I can’t pay it, so the State now owns my house?

  3. Once upon a time, the monarch did own a lot of land, and rents on that land provided for most of the money required to run the country. That always seemed more fair to me than taxing our labour (which implies that the state owns part of our labour, making us partial slaves).

    Of course, that all went out the window when they sold off the land or gave it away in return for political assistance- a quick buck now as opposed to a lasting income.

  4. I’m sure this will be blogged on soon enough by Tim, but Richie is now a legal expert as well – he’s using the UN universal declaration of Human rights to justify that non-payment of tax is an abuse of human rights meme.

    Problem is, once again, it’s nonsense.

    Tax law is wholly independent of fundamental human rights, and is also independent of property rights. Not paying tax when you buy a property for example, has no bearing on your right to own that property – the one does not automatically transmute to preventing the other (in this case, you would be prosecuted for the non-payment of tax, not the illegal ownership of property).

    The only time when your property rights become subject is through acts such as “the proceeds of crime” and again, this independent of tax law.

    Hat-tip: Advocate girlfriend and her senior counsel friends.

  5. “But you will never have your right to that property confiscated for non-payment of tax.”
    A little definite for a work in progress, no?

  6. Tim – that may be so in Blighty but in Italy if you are behind with your taxes, something that is very easy to do as there are LOTS, you will at some point get a letter informing you that unless you pay x amount by such and such a date that your car will be subject to a “fermo amministrativo” meaning that it may not be used sold or in any way administered. Now, it is still yours, but you may not pay road tax (until the fermo is lifted after which , obviously, they come after that as well).

    Obviously this means that if you are rich you buy another car, in your wife’s name and carry on. If you are a struggling plumber, electrician or whatever, you have to go to work on a fucking bicycle.

    Oh and the only way to lift the fermo is to pay the tax, no appeal no nothing.

    So, a thoroughly retrogressive and deeply injust procedure – Ritchie’d love it.

    Cuffleyburgers

  7. Are you being disingenuous there Tim? I’m sure you’re aware of the distinction between property taxes and transaction taxes. With property taxes, obviously it’s your property in the first place or they wouldn’t be able to tax you on it. But most taxes are on transactions, and if I buy something in a shop, I have to pay VAT, and they won’t let me take the goods away if I don’t. Or with house sales, the transfer of ownership cannot be registered until the stamp tax has been paid.

    However, I haven’t actually read what Murphy wrote.

  8. This is what happens when you feel obliged to write/blog/tweet every day yet have nothing whatsoever to say that is even intelligible, let alone of any value.

  9. So, imagine that you own the most expensive house in Downham Market
    …. and the house sells for £200,000

    Only a down-market ham would live in such a cheap neighbourhood.

  10. Tyler – I notice his response to you (after his first snarky misunderstanding of our comment) is essentially:

    “Some expert lawyers disagree with me. Therefore they must be in the pay of someone. So they must be ignored. And I am right”

    He is a conspiracy nutjob.

  11. If the council through an administrative error on their part fail to setup a direct debit for your council tax, do they now own your property?

    This is fun.

  12. Stamp duty was interesting; there was no way of enforcing collection, but if you hadn’t paid the stamp duty the State (including the courts) would not protect your ownership of it.

    But that’s still a long way short of saying that you didn’t own it.

  13. Actually PaulB, that’s not quite right with respect to Stamp Duty Land Tax.

    You can’t register a property sale with the Land Registry until you’ve reported the sale to HMRC. The payment of your SDLT obligation is completely separate. If you look at the penalties for late payment on HMRC’s website you’ll see that they mention interest, but nothing about taking your property off you.

    Which backs up what Tim is saying: once the property is registered, it’s yours. Irrespective of the tax situation.

  14. Oh dear god, I’ve just read Ritchie’s actual post about this. I hadn’t realised, but he’s managed to say that the poor and low earners who don’t pay tax are untermenschen lacking in human rights.

  15. Dear little Richard has failed completely to understand the seperation of human rights, property rights and tax law.

    Within the tax law part, he has also failed to recognise that there are distinct legal applications for no tax payable, 0% tax and X% tax.

    Honestly, with this one I don’t know where to begin.

    But as I say, it is fun watching him squirm – there is simply no way out of it for him this time.

    Anyone want to make odds on him admitting he is wrong though?

  16. Matty, PaulB and I were talking about the old stamp duty (abolished 10 years ago).

    The more modern Stamp Duty Land Tax has moved away from Murphy’s idea of making enforcement of ownership depend on paying the tax – no doubt a Neo-Liberal plot by the then Chancellor, Gordon Brown.

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