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Coalition rift over property tax

A split between Conservative and Liberal Democrat ministers has emerged after Nick Clegg's party demanded higher taxes on land and property to hit the rich.

Vince Cable, the LibDem Business Secretary, who has already proposed a "mansion tax" on homes costing more than £2m, floated the idea of a "land tax".

Tory MPs dismissed the proposal as unworkable. It is likely to be vetoed by the Chancellor, George Osborne. Mr Cable suggested business rates could be replaced with a tax based on the value of the site, and council tax replaced by a property tax calculated annually on the value of the land.

Mr Osborne set out a very different agenda, limiting his aspirations for hitting the rich to a further clampdown on tax evasion and promising additional measures to track down money held offshore.

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