The Mail on Sunday has corrected a story that could have wrongly led readers to believe a Labour Government would scrap the capital gains tax exemption for main homes, according to a press regulator.

The article, headlined: “Corbyn ‘war on homeowners’”, claimed Labour had proposed to “grab more inheritances and tax profits on family house sales” in a report commissioned by the party called Land for the Many.

Capital gains tax is paid on profit made from selling property, but does not currently apply to a homeowner’s main residence.

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The Mail on Sunday reported: “Homeowners would be taxed on the increase in the value of their home under bombshell plans being drawn up by Labour leader Jeremy Corbyn.

“The proposal to scrap the capital gains tax exemption on main homes would force owners to pay income tax on the profits when they move home – and lead to a ‘double whammy’ levy on their estates when the owners die.”

However, while the Labour report’s authors, including Guardian journalist George Monbiot, considered such a proposal they ultimately rejected it.

They said: “Applying a capital gains tax to main residences too would allow us to limit the wealth inequality arising from the housing boom, but would be controversial and would make it difficult for some households to buy properties of equivalent value when moving house.”

Land for the Many report co-author Anna Powell-Smith complained to the newspaper and the Independent Press Standards Organisation that the article was inaccurate.

The Mail on Sunday argued the “thrust” of the article was accurate as the report “had advanced the idea that property owners should pay tax that is more closely linked to the increase in value of their homes”.

But it offered to amend the online story and publish a clarification and apology as it “acknowledged that readers may have understood that the report proposed scrapping the existing capital gains tax exemption for main residences”.

After an investigation, IPSO ruled the Mail on Sunday had “inaccurately reported information featured clearly within a publicly accessible policy document” in a “serious breach” of Clause 1 (accuracy) of the Editors’ Code of Practice.

“Reporting that Labour had proposed to remove the exemption for main homes from paying capital gains tax had the potential to cause serious and significant concerns for readers,” the regulator said.

IPSO found the Mail on Sunday’s offer to address the complaint in its Corrections and Clarifications column within 13 days was not sufficient due to the “prominence of the inaccuracy and the fact that it was the central point of the story”.

The newspaper was therefore ordered to publish a full adjudication on page two, rather than page 16 where the article originally appeared.

It appealed against this but lost and the adjudication was published on 22 December, ten days after last month’s general election.

It has also been published online, while the original story has been removed.

Monbiot criticised the length of time it took for IPSO to investigate Powell-Smith’s complaint and the fact the adjudication was published only after the election.

He broke a routine embargo used by IPSO to stop the outcome of complaints being published until both sides have had a chance to endorse or appeal against the final adjudication.

The columnist wrote in the Guardian that this “rare victory against the billionaire press” would “count for nothing if buried until the election is over”.

He also argued that IPSO was “not fit for purpose” and that its process “seems designed to deter”.

“For much of the five months this has taken to resolve, the newspaper, with its vastly greater resources, was allowed to bombard [Powell-Smith] with Johnsonian arguments, or offer tiny clarifications on a remote page,” Monbiot wrote.

“It was time-consuming and intimidating. Most people are likely to have given up or accepted a meaningless concession.”

IPSO chief executive Matt Tee defended the regulator’s complaints process, saying it “supports those who feel wronged by the press and provides them with means of redress if the Editors’ Code has been breached.”

He added: “Every complaint we receive is dealt with thoroughly, which is why it can sometimes take time to reach a ruling and rightly, both publisher and complainant must contribute to the process.

“We have a dedicated team of complaints officers who support all complainants through our complaints process, offering help, guidance and where appropriate assisting the process of mediation.

“IPSO has dealt with over 47,000 complaints and enquiries from the public since it was established and we consistently receive high levels of positive feedback from complainants about how they are supported through the complaints process.”

Read the full IPSO ruling here.

Picture: Reuters/Hannah McKay