CGT on assets Inc primary residence at death

Already if you live in the southeast near London, your very modest 2 bed terrace is worth approximately £600k. If you’re single your allowance is £500k. If you die your kids will be made homeless to pay the inheritance tax of £40,000. No more taxes please, the hardworking low and middle earners shouldn’t have to slog all their lives to have it taken away. Where’s the incentive to provide for yourselves if they keep taxing. Also other European countries run far more efficient healthcare services than the NHS on less money.

But there's already stamp duty to pay on a move (albeit based on the purchase price of new property rather than sale price of old).

I disagree with the premise of introducing CGT onto death transfers - but think IHT is ripe for some changes.

If spouse passes everything to the surviving spouse, when the surviving spouse dies, £1,000,000 can be passed on along with pension pots entirely tax free.

He got the student loan repayment percentage wrong as well - it’s not 10% over the threshold

I tried to read with an open mind despite knowing what an uneducated dick Richard Murphy is, but when even the treasury’s own ready reckoner thinks increasing capital gains tax would actually reduce the CGT taken you have to wonder at point 1.

And then point 3 where he raises £7bn from taxing financial services more. Does he know financial services in the UK raise 13% of all taxes, and yet as an industry it is the most internationally mobile going. We’re not talking about mining core assets from the UK. Put tax on it and the entire industry will flit overseas overnight. 13% of tax take gone instantly.

so I stopped reading then to protect my blood pressure. What an idiot.

Ok OP let's start with the Royal family and the Duke of Westminster. We'll try your idea out in them and if it works then we'll roll it out to everyone including businesses and farmers. In fact let's first change tax laws so very rich people have to pay their fair share.

Your idea will go after the very people who keep the tax take going. A high proportion of whom are very mobile and frankly already feel like they are a cash cow.

Just for clarification:

King Charles III did not pay tax on the inheritance he received, after his mothers’ passing in 2022. This is a result of a private agreement, made between the British Royal Family and the government in 1993.

And

This incredible inheritance of £9.9 billion instantly made the young Duke one of the richest people in the UK and the wealthiest person under the age of 30 on the face of the earth. While this inheritance would usually attract a tax liability of 40% or £4 billion clever trust planning meant that no tax was payable.

for primary residence surely people would get round it by selling the house before they die. My mums house she bought for about £2000 in 1970, it’s a modest 3 bed semi nothing fancy worth about £250k now but there’s a massive capital gain there under your suggestion. She could sell it to me now for £250k and there is no capital gain as it’s her primary residence, there is no deprivation of assets as she now has £250k cash instead of a £250k house so her estate is worth the same but the cash isn’t subject to capital gains tax.

Yes, agree. Far more tax needs to come from taxing wealth than we do now.

If you want Western European public services do what Western Europe does and put basic rate tax up to 25-30%

Exactly

There's already IHT that's what it's for. Get the rest of the money from additional rate income tax

See, read and inwardly digest

https://taxingwealth.uk/

FYI Richard Murphy was a practising accountant so his proposals are intended to be 'workable' unlike the calls for a blanket wealth tax

It's the fairest thing to do. It would affect everyone working equally.

But you can’t target only workers, that’s the point. Particularly when we have such huge wealth inequality & a shrinking pool of workers. Non workers use public services too…

This strategy does not make money. Try asking Scotland. If you want Western European public services do what Western Europe does and put basic rate tax up to 25-30%. This is tax that everyone pays, so makes a vast amount of money. Putting up top rate tax makes very little as there aren’t as many wealthy as you seem to think, and they have far fewer ties to the UK.

I think if you’re paying IHT on an asset it’s reasonable that you rebase it. It would be harsh to pay 40% IHT and then still have to take the base as what the original owner paid in 1952.

Is it fairer to tax money that someone has got for doing nothing, or tax money someone has got for working hard and contributing to the economy?

Quite, do we want a productive economy or not.

What's being talked about though isn't paying cgt on death. So no immediate charge to tax.

Instead what is being suggested is the person inheriting the asset will inherit it at the cost the deceased paid for it, so when they sell it that's when cgt would be due. So, in the case of a house (as that is the most common asset people will leave) if you moved into it after it was left to you - no cgt at that point. Only when you sell.

Its complicated as the original growth in value is on the deceasd person and in the vast majority of cases there would (at least currently) be no cgt implications on the sale of their own property that they lived in - fully covered by a tax relief.

Is it fairer to tax money that someone has got for doing nothing, or tax money someone has got for working hard and contributing to the economy?

The threshold is very low

I think 1m before tax is ok. Both my parents house & in-laws homes are worth more. It’s not particularly because they worked harder than others it’s more because they bought in areas of London that gentrified.

Yes someone else should have to pay, the wealthy. All you have to do is raise income tax for additional rate. None of this crap, penalising people when they're grieving, taking away family homes

So how much do we tax the wealthy? And who are the wealthy? Are you wealthy if you earn well but don’t inherit anything? Not wealthy if you do inherit? We tax higher earners in line with most other Euro countries, it’s the middle earners that pay more elsewhere.

That’s how it used to work with CGT - quite complex calculations with indexation and various reliefs for different types of assets.

I don’t get why in the uk people resent children getting inheritance.

I don’t think people do but we have big issues in the country, low stagnant wages, ageing population & crap public services. The money has to come from somewhere but no one wants to pay. I’d rather pay it out of inheritance vs more income tax.

The threshold is very low. If you live down south and your parents planned their retirement well or died before they needed to use the bulk of their savings or sell their property to pay for care, then an average estate is easily going to top 700 k plus