Labour and a New Inheritance Tax Proposal

#81
Oh don’t you worry, the labour lot will soon lower that.
Where is our lefty arrse club to add some spice to this thread?
Here they are, having a bit of harmless fun

 
#82
One of Mcdonell's more sensible suggestions is to move part of the treasury oop north so its employees are living among the hoi polloi
 

Sarastro

LE
Kit Reviewer
Book Reviewer
#83
Acid Reign indeed you seem to live up to your user name

I want all my money to go to my children and grand children, right down to the fact I live very frugally so they can have more money, they are not feckless or reckless - I on the other hand, I am now the recipient of 2 public sector pensions the likes of which I doubt the next generations will be able to accrue

It also seems that the financial institutions aided and a betted by all governments want to maintain house price growth and mortgage slaves

Archie
See, this is an example of where the real stealth tax has already happened. People tend to look at public pensions like they are a freebie. They aren't. The deal with public pensions was always: we are going to pay you less over your career for similar work, but we will give you a generous pension. The pension is simply deferred pay that you didn't receive at the time.

What the Conservatives did was massively exploit that misunderstanding, by severely cutting pensions but without any rise in pay: in effect they just gave everyone a large pay cut. That was particularly harsh the closer you were to the cutoff point. E.g. if you had spent 6 years in the Army having been promised pay for those 6 years of £X + £pension , you now discovered you were going to get just £X. Not only were they cutting your future pay, they were refusing to pay the arrears they owed you! It's not a huge surprise that retention / recruiting has been a problem with that peer group.

Another example is the Army's attitude to leave: they treat leave as an additional allowance that can be withdrawn or cancelled by mid level managers (e.g. OCs or COs) It's not. It is a form of pay. Instead of saying "we will pay Ptes £19k for 365 days work", they say "we will pay £19k for 325 days work plus 40 days 'paid' leave". The paid leave is no such thing: nobody pays you not to work. It's just a daily rate, over a year, of £58 instead of £52. So when COs take away leave, they are cutting your daily rate without compensation. But OCs and COs don't have the power to alter a Ptes pay band. So they shouldn't actually have the power to cancel leave. Otherwise don't have the concept of "paid leave" - it's a con.

This proposal is the same thing. People have been regularly promised a reasonably stable system by which they can accrue savings for old age / inheritance, and have planned accordingly. Changing it now is effectively just stealing money that you (collectively, the government) promised would be safe.

Which, of course, is exactly why governments do it. They know that if taxes are predictable over a long period, then people quickly move to minimise them by moving their money to lower tax assets. So new governments have to find whichever lower tax asset is owned by the least number of their supporters or the most of the other side, and hit that up for a cash windfall.

It's a great way to make everyone mistrust the government and encourage tax evasion.
 
#84
You usually invent something when there’s nothing to have a go about. You’re losing your touch.

All you need to know about me and my kids is that we are all hard working honest people earning reasonable incomes through our endeavours.
Why do you think this is such a big deal?

I think you need to re-read and get your head around what Labour are looking at implementing - EVERYTHING you gift them above £125K will be taxed - EVERYTHING.

I haven't invented anything, Labour have -

Labour inheritance tax proposals could leave average earners with £189k bill for £500k home, Conservatives say

I think you'll find a lot more of the estate you have earned will be going to a Labour government than you were thinking would go to your kids. You're losing your own money.

You good with that?

As a hard working honest person earning good income through my endeavours, I am not.

I want to pass on my wealth to my kids, not a Socialist government, but that's probably because I don't vote Labour.
 
#85
Latest cunning plan to close all private schools, seize their assets and redistribute this vast wealth into state educashun.

Huzzah. A big one time "win"

Small matter of a great many children, associated teachers and properties suddenly going into the state system in perpetuity?

Errr....
 
#86
Okey dokey. IHT makes me grind my gears already. Yes, it is a tax that I pay on something I inherit, I didn't earn it, but essentially it is a secondary tax on the earnings and CGT of my parents (both already dead so been there, done that), but this piece of mental WTF:

Labour tax raid on inherited wealth to leave families £875,000 worse off

UK's Labour interested in new inheritance tax - McDonnell - Reuters

How is really going to work? Stimulate the economy - I don't think so. Kill the only real source of actual capital gains for the majority of the population, given the current base rate? Penalise anyone who buys a house, effectively? Are they mad? Lost for words really, and it doesn't just apply to houses.
Love the way the Tory press are trying to pin this on Labour.

I'm mildy surprised they didn't call them "Liebour". <<rolls eyes>>

Month or so ago I was at the Money Marketing Retirement seminar, and sat next to a guy called Michael Johnson at dinner. You may not have heard of him, but he is fizzingly bright and invented the Lifetime ISA.

I've asked for copies of his slides but I do recall him pointing out that something like a third of the UKs wealth is in property equity - a staggering amount.

I've asked him for copies of his slides so I can accurately relay his thoughts but the premise was, why not levy a tax on sale / disposal of property? Over and above Stamp Duty Land Tax...
 
#88
Are labour planning to give us the same pay and benefits as labour MPs, purely in the interests of fairness?
Are the Tories, given they're the ones in power?

Purely in the interests of fairness...
 
#89
Wow!

You ARE a poster on other stuff rather than just a single issue.one.

And just for information, my children don’t hate me or me them. Quite the opposite.
His account has been hacked.
 
#90
I've asked him for copies of his slides so I can accurately relay his thoughts but the premise was, why not levy a tax on sale / disposal of property? Over and above Stamp Duty Land Tax...
That will put a damper on the job market, if only people in rentals can afford to move
 
#92
Love the way the Tory press are trying to pin this on Labour.

I'm mildy surprised they didn't call them "Liebour". <<rolls eyes>>

Month or so ago I was at the Money Marketing Retirement seminar, and sat next to a guy called Michael Johnson at dinner. You may not have heard of him, but he is fizzingly bright and invented the Lifetime ISA.

I've asked for copies of his slides but I do recall him pointing out that something like a third of the UKs wealth is in property equity - a staggering amount.

I've asked him for copies of his slides so I can accurately relay his thoughts but the premise was, why not levy a tax on sale / disposal of property? Over and above Stamp Duty Land Tax...
The guy has replied to me..

Subscribe to read | Financial Times

Funding social care


Follow the money. By far the largest pool of wealth is tied up as home equity: some £5 trillion net of mortgage debt, 2.6 times GDP. In addition, it is concentrated amongst those soonest to need care: the elderly.

But how to get at it? Notwithstanding politics, a mansion tax (or higher Council Taxes) is impractical for one reason: cash flow. Many of the retired have lived in their homes for decades: their incomes have (massively) lagged rising property prices.

Higher inheritance tax is one option but, by planning ahead, it is easy to avoid. Better to introduce a Property Gains Tax (PGT) payable upon sale, when the cash would be available to pay it. Such an approach would effectively socialise the uplift in land values across society (via Treasury coffers). In parallel, Stamp Duty could be scrapped, to remove a barrier to mobility, and to help the next generation get on the property ladder.

Meanwhile, home owners are becoming wealthier by doing nothing, at the expense of the non-home-owning next generation.

In addition, the Guardian published this in Sept 2018

Inheritance tax: grasp the nettle

Sir,

The Commission on Economic Justice has just reported, proposing that inheritance tax (IHT) should be scrapped and replaced with a lifetime tax on gifts. Given that pension assets and equity in homes each represent some 40% of household wealth, any IHT debate should be focused here.

We should introduce a Property Gains Tax (PGT) on property sales, when the cash would be available to pay it. In parallel, Stamp Duty should be scrapped, to remove a barrier to mobility, and to help the next generation get on the property ladder. Such an approach would effectively socialise the uplift in land values across society (via Treasury coffers). Meanwhile, home owners are becoming wealthier by doing nothing, at the expense of the non-home-owning next generation.

As for pension assets, it is ludicrous that they are exempt from IHT simply because they reside within a pensions wrapper, not least because contributions are likely to have received up-front tax relief. In addition, unutilised capital growth and income are untaxed. Post-death, pension assets should be taxed as per other savings.

I know he's discussed this with HMG, but the Tory press don't mention that...
 
#93
The guy has replied to me..

Subscribe to read | Financial Times

Funding social care


Follow the money. By far the largest pool of wealth is tied up as home equity: some £5 trillion net of mortgage debt, 2.6 times GDP. In addition, it is concentrated amongst those soonest to need care: the elderly.

But how to get at it? Notwithstanding politics, a mansion tax (or higher Council Taxes) is impractical for one reason: cash flow. Many of the retired have lived in their homes for decades: their incomes have (massively) lagged rising property prices.

Higher inheritance tax is one option but, by planning ahead, it is easy to avoid. Better to introduce a Property Gains Tax (PGT) payable upon sale, when the cash would be available to pay it. Such an approach would effectively socialise the uplift in land values across society (via Treasury coffers). In parallel, Stamp Duty could be scrapped, to remove a barrier to mobility, and to help the next generation get on the property ladder.

Meanwhile, home owners are becoming wealthier by doing nothing, at the expense of the non-home-owning next generation.

In addition, the Guardian published this in Sept 2018

Inheritance tax: grasp the nettle

Sir,

The Commission on Economic Justice has just reported, proposing that inheritance tax (IHT) should be scrapped and replaced with a lifetime tax on gifts. Given that pension assets and equity in homes each represent some 40% of household wealth, any IHT debate should be focused here.

We should introduce a Property Gains Tax (PGT) on property sales, when the cash would be available to pay it. In parallel, Stamp Duty should be scrapped, to remove a barrier to mobility, and to help the next generation get on the property ladder. Such an approach would effectively socialise the uplift in land values across society (via Treasury coffers). Meanwhile, home owners are becoming wealthier by doing nothing, at the expense of the non-home-owning next generation.

As for pension assets, it is ludicrous that they are exempt from IHT simply because they reside within a pensions wrapper, not least because contributions are likely to have received up-front tax relief. In addition, unutilised capital growth and income are untaxed. Post-death, pension assets should be taxed as per other savings.

I know he's discussed this with HMG, but the Tory press don't mention that...
Have the present Government shown the slightest interest in these proposals? If not, why would the Press report it?
If so, how the hell do think they're going to get re-elected?
 
#94
Have the present Government shown the slightest interest in these proposals? If not, why would the Press report it?
If so, how the hell do think they're going to get re-elected?
I don't know; the Tory press are quoting Labour because they think they'll smear them, and the author isn't a politician so won't care.
 
#96
Most people in this country aren't liable for IHT. The threshold is very high.

It's the care home fees assessment they should be more worried about. Much harder to avoid.
But I suppose not everyone needs care, but everyone does die.
Actually, care home fees can be dealt with by the simple matter of becoming tenants in common and setting up a trust which benefits your children/NOK.
All this can be done as part of a Power of Attorney/money which any competent solicitor can sort out for you.

Looking at the above I don’t think I have explained the situation regarding home ownership properly. So if you jointly own a property with another person, the chances are that the ownership will be as a joint tenancy between you and your wife/significant other. This doesn’t mean that you rent your home, it’s just the primary legal term for who owns a property. It also means that the both of you own the property jointly and thus avoid Inheritance tax. By becoming tenants in common, you actually own 1/2 of the property each. So for inheritance tax purposes a single house has 2 levels of inheritance tax, one each. Under a Power of Attorney/Money, you simply leave your half in trust for your children (each, a joint but separate trust). More importantly a property legally protected this way avoids care home requirements, as the property is not yours it belongs to your children.

This is what you can do with a power of attorney, as any competent solicitor can tell you.
 
Last edited:

Sarastro

LE
Kit Reviewer
Book Reviewer
#98
Love the way the Tory press are trying to pin this on Labour.

I'm mildy surprised they didn't call them "Liebour". <<rolls eyes>>

Month or so ago I was at the Money Marketing Retirement seminar, and sat next to a guy called Michael Johnson at dinner. You may not have heard of him, but he is fizzingly bright and invented the Lifetime ISA.

I've asked for copies of his slides but I do recall him pointing out that something like a third of the UKs wealth is in property equity - a staggering amount.

I've asked him for copies of his slides so I can accurately relay his thoughts but the premise was, why not levy a tax on sale / disposal of property? Over and above Stamp Duty Land Tax...
This is much more sensible, but it's not a new idea. It already exists - it's called Capital Gains Tax, surely?

The main problem with this current IHT or this Labour-linked flat rate proposal is that it, in many cases, is quite likely to tax more than the available liquid capital - i.e. to cut through the jargon, you'll have to pay more in cash than you actually have cash. That becomes increasingly problematic when the most common non-liquid assets are property. The options then are:

a) realise non-liquid capital... e.g. sell the house in order to inherit it because the tax is too high
b) pay tax in installments, up to 10 years as it is at the moment, which is just ruinous to your disposable income

One problem with b) is that non-liquid assets tend to change in value over time. Say you inherited a London house worth £1m in early 2008, and had to pay (my rough estimate) £160,000 in inheritance tax. You don't have £160,000 of disposable income so you opt to pay £32,000 a year for 5 years by renting / mortgaging it. But in late 2008, UK house prices crash by 20%, changing the value of your mortgage or rental. But the inheritance tax was set at the value of the asset at the point of inheritance, so quite possibly you now cannot afford your tax. To make it worse, you have to keep paying interest on the value that the house no longer is.

Another problem is that captial values aren't always understood until the asset has been sold - simply that estimates and market prices vary. If the estimate is substantially higher than what the market eventually pays for it, you are out of pocket. (This also works the other way, of course)

Both of these things encourage inheritees to hold on to property as long as possible. Which calcifies both the property market (therefore new buyers ability to enter it), and social mobility (because there is a lot less movement of generational families between areas). It's a shitty, shitty system.

Additionally, the Telegraph example is well chosen (this at least is a topic they understand well...), because it describes a problem that is increasingly likely to affect should-be Labour voters. Something like 1/3 of individual capital in the UK is property, as mentioned above. Additionally, younger generations are and are forecast to continue earning less than their parents. So if a wealthy parent leaves an expensive house to a child who has chosen to be a teacher, there is little to no chance of that teacher being able to pay off the inheritance tax without selling the house (which invalidates the idea that you can leave the house) or quitting being a teacher. The effect is that you are penalising exactly the individuals who Labour want to encourage - children of wealthy families who take jobs that pay less than they could earn with their connections / education, but are generally viewed as contributing more to society: nurses, teachers, soldiers, etc. Again, it calcifies social mobility, encouraging people only towards jobs that make more money, or face taking a massive loss to their own income well above what seems fair.

It's a woefully misguided idea once you look at second and third order effects.

@Bravo_Bravo I'll also see your comment about the media unfairly linking it to Labour, and call you on it. [One of] Labour's problems at the moment is that they are enthusiastically sponsoring, retweeting, panel hosting many radical 'thinkers' who are coming up with some truely batshit insane ideas. The problem isn't new ideas, or Labour sponsoring new ideas. The problem is the thinkers are very bad at it, and the reception to the ideas is entirely uncritical because of the bubble Corbynistas have created where ingroup identity trumps everything else. I'll give you an example, because it's an area I know something about: Aaron Bastani and this book. The short version is that it's clear that this guy has almost no idea about economics, and particuarly the economics of the internet and the reality (or likely future reality) of technologies like AI. But he's written a whole book predicated on the economics of the internet and new technologies like AI, and how we should entirely base our economy on how he thinks they will turn out. Unsurprisingly his predictions are seriously flawed, and it's not too difficult to demonstrate that in advance. But it is terribly popular among Labour media and political commentators in the 20-35 age group (the Ash Sarkars and Grace Blakeleys), who - even before it was published - keep mentioning "fully automated luxury communism" as if it's an actual policy.

It is entirely legitimate to point out these links because, given that committed Labour policies are thin on the ground, it's reasonable to assume that - as with all these things - if Labour get into power, these same commentators will become SPADs, and suddenly have a remit and influence to push those ideas or make them policy advice. That's what happens every time there is a new party / government in. That is why they are commentators or writing books in the first place. That's how batshit insane un-examined ideas quickly become actual government policy.
 
#99
How do you know there is nothing to quote?
I can't prove a negative.
If there was something to quote, why have the left-wing press not latched on to it?
Just because your buddy has spoken to, or even presented his ideas to the Government doesn't mean they are interested in it.

I guess what I'm curious about is your claim that the tory press are trying to smear Labour by quoting Labour statements on this policy while remaining quiet about the Government's statements. Yet you've not presented any evidence at all that the Government have made any statements.
 
I can't prove a negative.
If there was something to quote, why have the left-wing press not latched on to it?
Just because your buddy has spoken to, or even presented his ideas to the Government doesn't mean they are interested in it.

I guess what I'm curious about is your claim that the tory press are trying to smear Labour by quoting Labour statements on this policy while remaining quiet about the Government's statements. Yet you've not presented any evidence at all that the Government have made any statements.
Riiiiiight....
 

Latest Threads

Top