Would you leave UK if Reeves starts taxing wealth

[Movingmarble]

Just that really. Wondering if anyone else considering it. DCs both at Uni in next year. We had thought of living abroad a few months each year anyway but now UK is getting worse and worse for tax. Not super wealthy but millionaires on paper and with various investments. Been to advisor and would have IHT bill of £1 mill + if we stayed which makes me so angry. Worked hard for so many years to provide for our family and feels too harsh.
Spoke to our eldest about this and she even said so many of her friends have parents who have moved abroad in last few years. We are lucky we have options for countries, feels hard but then a flight is actually fast than driving up and down to where DC are at Uni so makes me wonder.....

Feel so fed up the constant threats to those who have saved for future and not got into debt through spending on material things or holidays, tech etc etc....

Not really. The last £70bn borrowing and tax hike which included about half in taxes was meant to be a one off. That lie will be problematic for Reeves and Labour.

That’s not true. Pensions account for a large proportion of the ‘benefits’ bill.
The exact figure for those claiming benefits but in work isn’t publicly available but only 38% of UC as of Jan we’re doing any kind of paid work.

OP said, "We live in London so house prices higher. Maybe we should have had less stressful jobs and gone on extravagant holidays or bought latest in what we wanted and got into debt. Is that fair? No it's not. But we saved and bought a house and now will be targeted."

Another option rather than leaving the country would be to downsize and blow the money on extravagant holidays now? By the time you die there'll be nothing left to tax.

But that wouldn't give you such a good opportunity to make attention heading, anti-Labour headllines would it.

Norway had the vision to protect its oil wealth. The uk could have done too but chose short termism, spending North Sea oil revenue and the idea of a wealth fund I think in the 70s was abandoned. Labour and Tory governments can be blamed. I think Thatcher spent revenues on tax cuts and other things and also privatisation of national assets. However In the UK Shetland was clever with oil related community benefits.

That would be hugely irresponsible for lots of reasons and something we shouldn't be encouraging from a public finance perspective. Ideally we need people like OP to stay in the country so they can be taxed sensibly and remain net contributors. They also should have enough assets to fund any care needed in their old age and yes, pay a decent chunk in IHT.

The problem is that Labour is going to fall victim to the Laffer curve effect with people like OP. They are mobile because they have money, they have options and will simply take their assets and wealth elsewhere if the government puts too high of a cumulative tax burden on the rich. The fact that so many people seem to bury their head in the sand about this and to blindly insist on counter productive policies like wealth taxes is mind boggling. We need to raise more tax overall not less v

@Movingmarble Would you prefer it if Reeves starts taxing poverty?

Norway doesn’t just tax earned income from employment but also taxes unearned income such interest, rental income and income from shares. It also has a wealth tax on all assets.

If the UK were to adopt a similar system it is likely that low wage employees with no or limited assets would end up paying similar amounts whilst those with non earned income and assets would pay substantially more. This would mean that mid to high level earners would pay less income tax (whilst paying tax if they also benefited from unearned income and assets).

Younger mid earners who don’t have family financial support, who have student loans, higher housing costs, lower wages, high child care costs etc have a relatively high income but no assets pay relatively high tax and are the squeezed middle because the UK does not tax unearned income and wealth to the extent it taxes earned income. And allows legal tax dodges that benefit the already financially secure at the cost of tax payers struggling to cope.

Given the rhetoric around the undeserving poor and disabled that is pretty constant it is not surprising that welfare reform is seen as the answer.

But that is only because the squeezed middle paying income tax and NI have bought into the idea that they have to support those above them that are financially secure and have opted out of paying income tax and NI - maybe by retiring early or having unearned income - own property outright have private pensions and are using tax free wrappers for savings etc.

The best way to value work is to bring unearned income in line with income tax. That includes benefits and pensions and passive and rental income etc and earned income to a level where tax is paid. Plus a passive wealth tax on top of that. Then we can afford a decent public service with an equitable division of cost of delivery.

I didn’t consider pensions because although it’s classed as a benefit (which annoys me) I was responding to a comment about how people on benefits should get to work. Not sure it’s quite right to try to force people on their 70s 80s and beyond to get off their pension benefits and back to work.

And fraudulent benefit claimants and cash-in-hand workers.

I have very similar views. We're fortunate we could afford to pay more - we're not rich and there must be many others like us.

It's fair because the majority of your wealth comes from owning property which has risen enormously whether you have worked hard or not, you just owned it and have done nothing to 'deserve' this windfall.

High property prices are probably to blame for more than half the things wrong with the UK.

Norway ...also taxes unearned income such interest, rental income and income from shares

So does the UK

It also has a wealth tax on all assets
For higher earners, it adds up to less than UK inheritance tax over a lifetime, which they don't have at all. Again, this is far less redistributive than the UK IHT , with lower earners paying more of their fair share than in the UK.

We are nowhere near as wealthy as Norway as a country. Their nominal GDP per capita is nearly double our GDP. We need economic growth to build wealth and increase investment, definitely not increased CGT levels that discourage this. What a country like Norway can get away with taxation wise is very different than the UK. There are structural differences that make a huge difference.

We also need to make welfare cuts. The bond market has made it clear that this is necessary to provide much needed confidence in the UK's public finances.

Welfare an in UC or the state pensions ? Politically they would be difficult to do

What income bracket do you think should pay more tax?

Labour would find it hard. Reform not so much

The biggest issue is that it's a tax on the South East. You can live in a castle in the North, and it's likely to be less than a standard four bedroom box in Surrey. The people living there may well be in a house worth 800k, but they may well have a massive mortgage and no cash. Meanwhile North Yorkshire Castle owner is comfortable in front of his roaring fire.

To be absolutely fair, any tax on housing wealth would have to be regionally balanced out. With London and the South East having its own levels. So each region taxing the top 5% for the region for example. Nightmare to administer.

Cutting pensions for reform, that's the core vote never going to happen. UC possible but the savings aren't anything like the same

The amount that we are able to invest tax free in S&S ISAs here in the UK (£20k per year for anyone privileged enough to have that much spare), as well as the amount that people can put in their pensions with full tax relief (up to £60k for those who are fortunate enough to earn enough to be able to put anywhere near that much in) is extremely generous compared to most other countries.

This is something that people are quick to forget when they complain how hard done by they are as higher earners.

Well aren’t you just the lucky ones? Personally if someone has enough money to have a £1m IHT bill when they die, then why should they be moaning about their inheritors receiving slightly less inheritance - which is money that the inheritor has done fuck all to earn?
Give your DC your money now whilst you’re alive if you’re so concerned.

I'm not so sure.

(and massively reduced)

https://www.rightmove.co.uk/properties/166723985#/?channel=RES_BUY

I'm not encouraging it. I'm here paying my taxes happily as I always have.

Absolutely.

It's a real double blow to those having to scrimp and save for a relatively small home in an expensive region to then be taxed because on paper it's worth more when in fact most of the house is actually owned by the bank. The mad thing is that Labour will only retain London seats according to the most recent polls and this is one of the areas that will be hit by such a policy the most. Political madness!

Yes, pensions would be tough. But disability reforms and UC could be possible. Immediately reinstating the two child CB cap would make a start.

But that only applies is the property was bought many years ago. What's the cut off? Someone may have only bought a house 5 years ago, at a huge price, with a huge mortgage, and spent several tens of thousands doing it up. They haven't "made" any profit. How do you account for that scenario?