Shortly after the Coalition government took over, there were indications that a higher rate of capital gains tax should be imposed on owners of second homes.

This issue was complicated by the pseudo-political balance of power between the Conservative and Liberal elements of the coalition. The Liberals wanted to penalise middle-class holiday-home owners and use the money to offset income tax for the lower paid.

With more important things to worry about, this issue took a low profile but there are rumours that it may came up again.

Brian Jones, a tax consultant said that "Differential tax rates based upon usage of the designated property are always going to be difficult to manage". Where we go from here has much more to do with political trade-offs between Clegg and Cameron than any co-ordinated fiscal policy but it does represent a real risk to financial planning for many families.

In the earlier discussions, a special CGT rate of up to 50% had been discussed. This wou ld be extraordinarily damaging to hard pressed families that have seen negative capital growth combined with pressure on rental incomes.

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