New property taxes proposed

The 50p tax rate will almost certainly be abolished during this Parliament and replaced with a selection of new property taxes.

In an interview with the Financial Times, Deputy Prime Minister Nick Clegg suggested that the 50p high rate of tax would eventually be scrapped and replaced with a range of new property taxes.

The Liberal Democrats have long proposed the idea of taxing less on income and more on land and property.

During the last general election campaign, senior Liberal Democrat Vince Cable suggested that a so-called "mansion tax" should be introduced on homes priced £2m plus, and it seems that he could finally get his wish, with homeowners, particularly the rich, potentially facing a levy on the value of their homes.

In an interview on BBC Radio 5 Live's Pienaar's Politics, Mr Cable indicated that the Liberal Democrats would support Chancellor George Osborne's review of the 50p top rate of tax announced in the Budget if a new property tax was introduced.

He commented: "It needs to be a change which is fair overall and does take account of the fact that the wealthy have got to pay their share. And the emphasis may well have to shift from high marginal rates of tax on income which are undesirable, to taxation of wealth, including property.

"There is a very strong argument that you need to have a proper base for taxing property. I'm sure that's one of the things we're going to have to look at as we change away from these very high marginal rates.

"Certainly what I and my Liberal Democrat colleagues will want to see is a very strong commitment to fairness in taxation - and that means lifting low earners out of tax which is what we have done in this Budget - but also making sure that people who are very wealthy and very privileged do pay their share."