European markets end mixed
In an uncertain day ahead of a busy week, the Spanish stock market bucked the trend and jumped sharply on hopes that the Catalan independence crisis could be resolved. A positive set of GDP numbers for the country also helped sentiment.
Elswhere the FTSE 100 slipped lower, as its overseas earners reacted badly to a stronger pound, which moved higher ahead of this week’s Bank of England meeting where the first interest rise in a decade is widely expected.
On Wall Street the latest developments in the investigation into possible Russian interference in the US election saw markets slip back. There was also talk that President Trump’s long awaited tax reforms may only be gradual. The final scores in Europe showed:
- The FTSE 100 finished down 17.22 points or 0.23% at 7487.81
- Germany’s Dax edged up 0.09% to 13,229.57
- France’s Cac closed 0.01% lower at 5493.63
- Italy’s FTSE MIB rose 0.39% to 22,752.89
- Spain’s Ibex ended up 2.44% at 10,446.0
- In Greece, the Athens market added 0.59% to 743.57
On Wall Street, the Dow Jones Industrial Average is currently down 63 points or 0.27%.
On that note, it’s time to close for the day. Thanks for all your comments, and we’ll be back tomorrow.
On Wall Street, the Dow Jones Industrial Average and S&P 500 continue to suffer, not helped by talk that the much anticipated Trump tax reforms could now only be gradual.
So the Dow and the S&P 500 are both down around 0.3%. But the Nasdaq Composite has slipped just 0.1% as investors still like the look of technology stocks in the wake of last week’s bumper results. Apple and Facebook, which both give updates this week, are both in demand.
Back with the UK public finances, and Labour MP Stella Creasy has found a tax loophole she believes could bring in some £8bn to the public purse. She writes:
There is a country that taxes British residents, and British companies, when they make money on selling commercial real estate, but doesn’t tax foreigners. That country is the UK. Closing the tax loophole around non-UK companies and commercial property sales would level the playing field for British businesses and at the same time help tackle the overheated housing market. It would also generate substantial revenue – enough to cover the entire public health budget for a year, for example.
According to the British Property Federation there is about £871bn worth of commercial real estate in the UK – 10% of our nation’s net wealth. Not only is this hugely important in its own right, its value impacts on the price of land, and hence of new homes. About 20% of commercial real estate is sold each year – worth an eye-watering £115bn in 2015, according to Her Majesty’s Revenue and Customs.
When a seller is a UK individual or company, they are subject to UK corporation tax on their capital gains. Yet where the seller is foreign they are not. Approximately one-third of all UK commercial real estate – including most high value property – is held through offshore companies. Typically these companies are in tax havens, or structured so they pay no tax on the capital gain. Indeed, British taxpayers should be asking tough questions as to why their government turns a blind eye to anyone who holds UK property in offshore companies.