The really rich don't pay inheritance tax

We did something with our Will and something with a Financial Advisor. You can tell how much notice I took at the time!

I can ask Dh to give me some more info if you're interested?

how did you do that?

How do you qualify rich?

We have a trust set up legitimately to enable as much of our assets to go to our children as possible. It costs very little to administer and set up therefore anyone can do it not just "the rich".

There is a severe shortage of Ferrari's on our drive we don't use net jets and our dc go to state school so we're hardly in the super league.

he was nearly right! right in principle i suppose

Wall Street Journal was the source for Dh apparently. I will grab a link after morning mayhem subsides. Thanks for that mmrsceptic. Very helpful

Sure I was rounding and doing it in my head! I figured 6 m is a quarter of 24m so it's about 27pc of 23 million. It's about 25.52pc with a calculator.

Why is it 29m? Are you counting the public sector workers? Because they are paid for by the 23 million. They don't pay for themselves, they can't possibly. It's private sector money that pays for it all.

No it hasn't hit 70m yet, it's still only about 62m. I collapsed into laziness after hunting for all those other figures.

Don't mean to quibble too strongly, but 6/22.8 is not as high as 27% as it is 6/ (6+22.8) = ~ 21% (20.8333_) and before the extra 735k would have been 6.09 / (6.09+23.555) or 20.54%_

All the same, it is rather worrying to see how much depends on the public sector. Seems to me that it is closer to 29.5 m supporting the country's population. Has it reached 70m ?

I also worry about what proportion of the money spent is taken in a fraudulent manner (remembering how different firms got together to 'rig' which would get a contract, and part of the amount the winner received was passed on to the 'losing' firms, while the funds came from local or central government funds, ie from taxpayers, for crooked bosses to line their own pockets).

Thanks ms, will look into it later (am just about to listen to some drama and won't concentrate properly on either if I try to handle both after 20-something hours awake).

excuse i had to go, sick child

Yes: so if 53pc of the economy is public sector it means that although people may not actually work in the public sector, their income is dependent on it: eg private building contractors, PR firms, consultants etc etc etc.

The awful thing about the figures is that's 23 million people supporting 70 million people. A fifth of people of working age are "economically inactive".

Anyway here's the link.

much better than the Mail as the figures are more easily read so you can make your own interpretation

The correct figures are: public sector spending represents 53 per cent of the economy. Public sector employment represents about 27pc or so of employment.

These are the figures.

Public sector jobs increased by 5 per cent over a year to 6.09 million. In all, the state gained 290,000 employers from September 2008 to Sept 2009. During the same period, private sector jobs fell by 735,000 to 22.82 million.

this is the story that conflates the two so that it looks like 53 pc work for the state

realistically it's more true than it looks though

more later

you can't leave it, I think it is true

hold on

I'd have to leave it then Alouise, on the basis that I cannot see the numbers involved going from the 1 million (?) working in the NHS to around 12 million (a guess - 60+ million population, maybe 24 million working, so 50% would be 12 million, IYSWIM) involved with other local authority and other civil service jobs. I suppose I could trawl through the NAO figures as those might show numbers employed in round figures for Schools, Police, local councils, government departments, and so on. But 12 million ?

webdude That stat comes from my dh. He does exciting (yawn) stuff with stats and charts and i trust him more than a Quango with a press release and an agenda.

Take it or leave it.

I am strongly in favour of £10k tax free allowance for adults and £5k for children that is feely transferable within a family unit and then 50% income tax above that rate.

I would prefer to see capital gains and inheritance tax removed but houses subject to capital gains tax just like every other asset. The fact that people can live in a house and earn huge untaxed capital gains is wrong. It distorts the economy and makes property speculation far more attractive than investing in and developing real businesses.

TBH inheritance tax on death of an old person only really rectifies the fact that that person has made huge untaxed property gains by owning property during their life.

Me and DW have family trusts and legitimately would not pay inheritance tax. We did it because DW was gravely ill and we had very young children. In that case it does seem grossly unfair in cases where both relativley young parents are killed in a car crash or illness but children survive for the Govt to then come along and take a chunk of the money left by parents when those children will need to be looked after by elderly relatives who may themselves only have a small pension.

The issue of paying for care of the elderly is a very complex one. I do think old people should use their assets to pay for it though. Problem is that people who do not make provision get care for free - which those that have saved feel is very unfair.

This is another example of how taxes only seem to be paid by the little people. Really pisses me off. I don't object to people earning of even inheriting mega bucks but weaseling out of paying into the system is just out of order. Morally wrong IMO.

However the Uk has a very fixed attitude on inheritance tax. People regard it as their right to pass on their house to their kids and that to have sell it to pay for elderly care is bitterly unfair which in a way it is. However as we all know the state can't afford to pay.

Do people have a "right" to accumulate property wealth then expect the state to pick up the care home tab? It's an interesting one.

Ninna - I wonder if there is a 'break down' of inheritance amounts paid?

I found some numbers which suggest total inheritance tax per year is about £3bn and that is paid on the estates of approx 17,000 individuals (average - £175k each??)

I would hope that the majority of the £3bn comes from a few paying significantly more than £175k.

Does anyone have better figures than mine?

I alawys thought tax on tips is unfair, the customer tips you has already paid tax on that moeny that has been earned, then tipping a waitress/er or barman/wom is then taxed again, so effectivily taxed at 22% twice

I also think it is unfair national insurance is stopped at around 40k the rate stayes the same, a person earning under 10k will pay double the NI than the PAYE, hardly fair.

"as are the state employment of 52% of the population"

Where did that come from, please, Alouiseg - I can quite understand there are a lot of government employees one way and another, but are there really statistics suggesting 52% of working people are funded from local/ central government?

Alouiseg - x-posted.

BIWI I think the idea is to think about different ways of collecting tax.

Yes, VAT is cheaper to collect than income tax - But given that VAT is not considered a redistributive tax, I can't see much support for it replacing income tax.

However, I did read an IFS report which argued that the lower a persons income the less VAT (as a proportion of spending) paid, because more spending was on VAT exempt goods (e.g food)!

It is unfair to the poorest sections of society but the rich are the biggest consumers of goods and services anyway. As long as food, energy, housing are exempt everything else would be included it could reduce housing costs at the lower end because supply would be greater once the shackles of stamp duty had been removed from the more expensive properties.

It is relatively cheap to administer because it is collected from businesses rather than individuals.

A flat rate would be my first choice but a high vat rate would be my second best.

But HMRC doesn't just do NI and income tax...it also deals with customs, smuggling and something else...oh what was it...Oh yes, VAT.

But VAT is a disproportionate tax, and it is unfair on people who earn less - therefore you're also pandering to the wealthy this way.

And you still need people to run the VAT system!