Yet another minister has been forced to resign because she flipped her home for tax purposes. Because capital gains tax is payable on property sales with an exemption for the tax payer's principal residence it makes sense for any one with two or more homes to be principally resident in the one they plan to sell. All that is required to establish residency is to occupy the property for a period of time (in this case the minister's tax advisor suggested one month) and then when its sold no CGT arises and the tax payer moves back into their other home and that then becomes the principal residence.
Now all of this is perfectly legal, its a loophole which has been in place since CGT was first levied on property, and anyone who owns two properties would be foolish not to take advantage of it. This is the difference between tax avoidance and tax evasion. If you sell a property that is not designated as your principal residence and do not declare the sale for tax purposes then that is illegal - if you go through the minor inconvenience of reestablishing your residency in the property concerned you can avoid a hefty tax bill and that is perfectly OK.
So why did the hapless minister feel compelled to resign? Well its all down to the hypocritical humbug which features so much in the UK media. I doubt whether the editors of the national press have never engaged in some tax avoidance measure: blind trusts and jumping a generation for inheritance tax purposes for example? It is surely within the right of any individual to arrange their affairs in such a way as to minimise their tax bill providing what they do is not illegal and that goes for treasury ministers just as much for anyone else. But then, no one has put the financial affairs of journalists and editors under the spotlight. Why not? These individuals have an enormous effect on our public life and our politics. They tooo should be held to account.