Blears home deals raise an £80,000 question
By Christian Gysin, Kirsty Walker and Matt Sandy
Last updated at 10:50 AM on 04th June 2009
Second claim: Hazel Blears leaves her London office after announcing that she will resign as communities minister
Allies of Hazel Blears claim she was the victim of a ruthless smear campaign as she was forced to defend further allegations of avoiding capital gains tax.
Within minutes of her resignation, Government sources were briefing that she had failed to pay the tax on the sale of not one but two taxpayer-funded London homes.
The implication was that she was quitting to avoid another dose of negative publicity.
But a spokesman said the fresh allegations had 'nothing to do with her decision to resign'.
The Communities Secretary volunteered last month to hand over £13,000 to the taxman after she avoided paying the duty on the sale of her 'second home' in Kennington, South London.
But yesterday it was made clear that the cheque she displayed to the TV cameras covered the sale of not just the Kennington property but another in Docklands.
In both instances, she apparently declared the flats 'second homes' to claim Commons allowances - before designating them as main homes for tax purposes to avoid CGT.
The practice, known as 'flipping', has been condemned by Mr Brown as 'totally unacceptable'.
The existence of a second property was said to have been discovered by a Cabinet Office compliance unit, which is trawling through ministers' files in the wake of the expenses scandal.
Friends of Miss Blears claimed the fresh allegations were deliberately leaked to discredit her in case she turns on the Prime Minister.
One said: 'Downing Street have known about this for weeks. But this is now being spread about as if it is new.'
A spokesman for Miss Blears added that she had also disclosed the existence of the second property on her website last month.
The statement, which was posted three days after she agreed to hand back £13,000 to the taxman, said: 'When selling that Kennington flat, and also one in Shad Thames before I became a minister, I checked the rules for the Inland Revenue in terms of designating a property as your main home.
'I followed those rules as they meant there was not any liability for capital gains tax.'
The spokesman added that the £13,000 capital gains tax she had repaid had been calculated by Revenue and Customs.
The property trail for Miss Blears began when she and her husband Michael Halsall bought the Docklands flat in Shad Thames for an undisclosed sum in December 1998. The couple sold the property two years later for £150,000.
Two months later they jointly bought a flat in Kennington for £155,000 before selling it in August 2004 for £200,000 - a profit of £45,000.
The pair then bought a £300,000 flat in Farringdon, Central London, in November 2004 for £300,000. It is currently valued at £500,000.
They also bought their home in Salford for £130,000 in June 1997 and that property is now worth around £300,000.
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