The Labour Government

bluenova said:
It's not the middle earners though. It's the top few %.

I've got no idea of your situation, but if you are worried that you can ONLY pass on £500k tax free to family, then that puts you in an incredibly fortunate situation.

I don't put you in the same category as this man, but it's worth watching to see just how committed he is to thinking his £80k earnings was nowhere near the top 50%, never mind top 5%.

www.mirror.co.uk

Man thinks his £80k salary is average in bizarre Question Time rant

The man claimed he was nowhere near the top 50% of earners in the country - despite his very healthy annual income. A clip of his rant on the BBC show quickly went viral last night.
www.mirror.co.uk www.mirror.co.uk
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Actually more than 12% of the population have an income of £80k+ And that was 2021, so presumably it's more like 13% or 14% now.

And the average UK house price is around £300k and most people when the die of old age, own their homes. The average price of a detached house is £450k, and of course being an average MANY are much higher than that.

The idea that anyone who earns £80k and has a £500k house is some kind of outlier edge case, is nonsense. There's probably 5m or 10m people who fit into that category.
 
Churchlawtonblue said:
On assets they have already paid tax on.
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Nah - they'll probably equalise capital gains tax with general taxation. They'll see that as a tax that doesn't hurt most.
Trouble is that untaxed money is normally invested for interest with over 50% going into UK businesses.
Raising Employer NICs are a tax on jobs so that's another brain fart.
Taxing non dons will drive them elsewhere so we don't get the tax they pay on spending on this country. It really is a self defeating policy.
We still need oil and gas and will do so for years even if we reduce carbon emissions - so why not drill for it in UK waters rather than import it and get tax revenue from it to pay for the green revolution. No apparantly not.
This lot will tax it if it moves and wonder why we aren't raising the tax levels expected. What I thought was a well costed manefesto was based on lies.
 
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Churchlawtonblue said:
Inheritance tax, this has effectively increased year on year with house inflation anyway. It also mostly affects those that have savings and assets built up after already paying tax. So people end up being taxed twice on the same earnings. Its an awful tax that needs abolishing or at least having its threshold raised significantly.
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Regarding IHT, there is also the residence nil rate band of £175,000 maximum which applies if someone leaves their home or their share of the home to direct descendants. If this is the case, then the deceased's estate would have to be worth over £500,000 before any IHT is due, rather than the headline lower figure of £325,000. I only found this out when sorting out my dad's estate over the past couple of months, being both an executor and a beneficiary. Before I knew this, I thought we'd be sailing close to the £325,000 threshold but turns out we're comfortably in it when factoring in the £175,000 nil rate band.
 
Chippy_boy said:
Actually more than 12% of the population have an income of £80k+ And that was 2021, so presumably it's more like 13% or 14% now.

And the average UK house price is around £300k and most people when the die of old age, own their homes. The average price of a detached house is £450k, and of course being an average MANY are much higher than that.

The idea that anyone who earns £80k and has a £500k house is some kind of outlier edge case, is nonsense. There's probably 5m or 10m people who fit into that category.
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The £80k was in 2019. I shared the clip because he genuinely thought he was in the bottom 50% of earners.

The average house price you quoted was almost the same as the one I used, and it's still £200k below the threshold to even START paying IHT.

There's no argument at all that people whose estates qualify for IHT are amongst the wealthiest in the country. They are definitely not anywhere close to middle income earners.
 
bluenova said:
The £80k was in 2019. I shared the clip because he genuinely thought he was in the bottom 50% of earners.

The average house price you quoted was almost the same as the one I used, and it's still £200k below the threshold to even START paying IHT.

There's no argument at all that people whose estates qualify for IHT are amongst the wealthiest in the country. They are definitely not anywhere close to middle income earners.
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OK, didn't realise you were talking 2019.

But there absolutely is an argument that those with £500k+ estates are wealthy. Of course many are, but there are millions (literally) of people who have a home worth more than that, but is sometimes because they've lived in it for years and seen huge increases over that period. That does not necessarily mean they have a high income and are "well off". Half of the east end of London probably falls into that bracket!

And that is the problem with so called "Mansion taxes". First of all, a £500k house is not exactly a mansion these days, is it. And second it is a blunt tax instrument that takes no account of someone's ability to pay it.
 
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bert38 said:
Inheritance tax is a funny one. Why do people get so worked up about it? You’ll be dead, you won’t know, that’s literally how it works.
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I think you kind of miss the point? Most people with kids want to give their kids the best possible leg up in life, and that means working hard all their lives so that they can leave something behind for their kids. Not leaving it behind so that the government can take what you've accumulated and fritter it on £11bn foreign aid schemes.
 
Chippy_boy said:
OK, didn't realise you were talking 2019.

But there absolutely is an argument that those with £500k+ estates are wealthy. Of course many are, but there are millions (literally) of people who have a home worth more than that, but is sometimes because they've lived in it for years and seen huge increases over that period. That does not necessarily mean they have a high income and are "well off". Half of the east end of London probably falls into that bracket!

And that is the problem with so called "Mansion taxes". First of all, a £500k house is not exactly a mansion these days, is it. And second it is a blunt tax instrument that takes no account of someone's ability to pay it.
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I know from working for a charity in a rich area of the country, that there are plenty of people who are asset rich/cash poor.

However, for IHT purposes, these people will be dead. Whoever inherits, has just got an asset worth £500k+. Unless the person inheriting is also living in the same house (and the average age of inheritance these days suggests that's going to a very small figure), you're not talking about a poor person paying. You're talking about someone who is £500k+ richer than they were the day before.

Even then, they're only paying the tax on anything ABOVE the £500k.
 
Chippy_boy said:
I think you kind of miss the point? Most people with kids want to give their kids the best possible leg up in life, and that means working hard all their lives so that they can leave something behind for their kids. Not leaving it behind so that the government can take what you've accumulated and fritter it on £11bn foreign aid schemes.
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A leg up in life when they are already middle-aged ?

Has it escaped you that you are basically asking for the same treatment as the Royal family?
 
Chippy_boy said:
I think you kind of miss the point? Most people with kids want to give their kids the best possible leg up in life, and that means working hard all their lives so that they can leave something behind for their kids. Not leaving it behind so that the government can take what you've accumulated and fritter it on £11bn foreign aid schemes.
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I haven’t missed the point at all. One of the biggest problems in this country is the wealthy hoarding money and passing that hoarded money on-whilst it gives a ‘leg up’ to those children fortunate enough to win the race to the egg everyone else is penalised-it’s a skewed system.

The overwhelming majority don’t pay it.

And you’re still dead.

Wasn’t it initially brought in an attempt to create some wealth redistribution? That’s what this country needs, not more austerity which impacts on the poorest most of all.
 
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Mr Kobayashi said:
A leg up in life when they are already middle-aged ?

Has it escaped you that you are basically asking for the same treatment as the Royal family?
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As a 54 year-old who is about to inherit half of my dad's share of his house you could say that I'm conflicted on this topic! But I have to say that I agree with the bolded bit. None of us - once we reach a certain age - should really be relying on our parents financially. That said, most parents are likely to leave all or part of their estate to their kids and if I had kids I'd be doing the same. I also get the double taxation argument, but with the threshold being as high as £500,000 before IHT kicks in then unless you're leaving your estate to a dozen or more people then the beneficiaries are getting a fair old wedge tax-free.
 
I am afraid I am always puzzled when people go on about double taxation.

Every time I buy something that incurs VAT (or fuel duty or alcohol duty) I am double taxed as I have already paid tax on the money I am spending.

IHT is not double tax. For a start, most of my estate, when I die, will be my house, which has inflated hugely in price from about 64k to over 300k.I have not paid a penny in tax on that unearned increase in my nominal wealth. Not one penny.

Moreover, for anything I leave behind, I shall not be paying IHT. That will be my heirs and assigns, and they have never paid a single penny of tax on my property. So how, pray, is it 'double tax'? More like single tax with a very generous tax-free allowance.
 
Chippy_boy said:
I think you kind of miss the point? Most people with kids want to give their kids the best possible leg up in life, and that means working hard all their lives so that they can leave something behind for their kids. Not leaving it behind so that the government can take what you've accumulated and fritter it on £11bn foreign aid schemes.
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Well said, C-b! And I'd sub the word 'schemes' with 'scams'!
 
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