Labour affirms capital gains tax rules

Labour Party finance spokesperson David Parker has affirmed that family homes held in trusts would not be subject to the party's capital gains tax policy.

During The Press leaders debate in Christchurch last night, National leader John Key almost derailed Mr Cunliffe when he asked the Labour leader directly about the tax situation for family homes in trusts.

Mr Cunliffe avoided answering and, after the debate, Mr Key said that was because the Labour leader did not know the answer and because a house in a trust would be subject to the tax.

But Mr Cunliffe said Mr Key had got it wrong, and, asked why he did not make that clear during the debate, said he thought he should check the facts.

Mr Parker today reiterated the party's policy on family homes held in a trust. "If it is a principal family home there's no capital gains tax payable," he told Radio New Zealand's Morning Report programme. "If it's not a principal family home then there will be, although if it's a holiday home and it's passed through the generations that doesn't attract a capital gains tax either."

During the debate, Mr Key promised to announce more details of tax cuts for low and middle income earners next week, as he criticised Labour's financial management.

Mr Key said National would produce big enough surpluses to allow it to cut taxes, while accusing Labour of making big spending promises.

The National Party leader had intended to announce the broad outline of tax cuts on Monday but delayed it because of the tragedy in Ashburton.

He and Labour leader David Cunliffe disagreed over which party would manage the government's finances better. Mr Key was confident about National's financial management, telling the almost 700 people gathered that it would maintain and grow surpluses, pay down debt and continue to reduce ACC levies.

He said when it made its economic policy next week it would show there was some room for modest tax cuts for middle and low income earners.