What tax do you most hate

[Taxta]

I’m torn between stamp duty and inheritance tax.

I agree. Those who will pay IHT are already very wealthy. I am likely to inherit a large amount of money but thanks to my parents' wealth (as well as my own hard work to get a good job) am already very comfortable. I have no problem paying tax on the money I will inherit.

@MrsBennetsPoorNervesAreBack. In our case then yes, I accept that the increase in value hasn’t been earned, although the IHT threshold certainly hasn’t increased in line with inflation over the years. But what about people who are buying their first house now for well over £1m? That's not uncommon for people working in the city with huge salaries.

Inheritance Tax - because it disproportionately effects those who die unexpectedly which adds to the trauma of sudden death. Those who have time to plan can largely avoid it. I also disagree with double taxation in any form.

Stamp Duty - it is strangulating the housing market. I think there should be exemptions for individual private residences in line with Capital Gains Tax but should still be payable on second homes or buy to lets, etc.

Council Tax - it is a huge extra tax paid out of taxed income. It should be abolished completely, councils streamlined with standardised national rather than local policies and the costs added to national taxes. There is too much local variation and 'interpretation', especially in planning rules.

National Insurance - again should be abolished and costs added to income/corporation taxes. If this was achieved, in future years the arguement that pensions are contributory would disappear and the public would accept that they are a benefit so only those on low incomes would be entitled. Reform of NI and pensions needs to start now as it is slow to change.

VAT - I think we need differential rates. True luxury items and those considered harmful in some way should be taxed at a much higher rate to impact the most wealthy. For example - long-haul flights, luxury yachts, private airplanes, super-cars, maybe even champagne! Utilities and other essentials that are taxed should be taxed at a much lower rate, say 10% instead of 20%. It should largely be an optional tax on spending that doesn't unfairly impact the lowest paid.

I agree with inheritance tax after a large threshold. As stamp duty is only charged for houses over a certain threshold on assets for which no tax is due on the profit made when selling it is probably fair too. Taxes have to come from somewhere. I think the issue is whether the taxes collected are being wasted or used in ways they shouldn't be. And in whether they are fairly distributed with everyone who can afford to pay them (eg. Amazon, the self employed etc) paying them.

There's double taxation on lots of things.

And no, I don't speak for myself. I point out what's obvious collectively. My personal circumstances have nothing to do with it.

People seem to want great services. Good health service. A navy that can turn up and defend the nations interest. Great pensions. No potholes. Care homes without them having to pay for them. Better education for kids.

Well all those things cost money and if we want them better then we have to find ways of paying for them.

It's about joining the dots and actually thinking sensibly rather than constantly demanding more and paying less is some sort of way forward.

I don't really care whether the nation wants to move towards low taxation and poor services or high taxation and better services. There are merits to both approaches for me - and less desirable consequences. But I do care that people think in a sensible way and realise they can't have it all. Because the result otherwise is ruin.

VAT & Stamp Duty

Hmm, unearned? Plus if they live until their 90s they often lose quite a lot of it in care costs. And if they don't, why shouldn't those the loved benefit rather than the state

Ironically, the posters on this thread who are “happy” to pay the inheritance tax, aren’t the ones who actually earned it? They are going to get a windfall and are happy to pay tax on it. Perhaps I would be too? Don’t know, it has never and will never happen.
When YOU are the one who has earned that money and already paid massive tax on it, it sticks in the craw.

I disagree. I don’t count myself as wealthy at all. My annual income is now about £25,000 a year. I live on a state pension and a very modest private pension, plus what is now a very low income from my self employed work - Im beyond retirement age now and will be stopping work completely by the end of the year. We don’t have loads of money tucked away in savings but we live in south London and like most parts of inner London house prices and three or four times above the average for some parts of the country, and our very ordinary house is worth over the threshold for IHT. My daughter will inherit everything when we die but won’t be able to live in her family home because she will have to sell it to pay the IHT.

Unearned, yes. They bought a house at x and now it’s worth 5x.

The estate as a whole is taxed, not the individual beneficiaries

Council Tax is very unfair in the way it is structured, properties need to be re- valued. people saying they don’t get any services may be correct because most of this is taken up by social care and SEND, which can seem invisible until you or your family rely on them.

I get to know council tax bands across England and those who actually pay council tax in more affluent areas pay less. I think this is because in more affluent areas a higher percentage of the population pay so it can be lower for everyone. This affects the “squeezed middle” too poor to just easily afford CT too rich to get reduction.

ChelseaBand A £1,095.62. Bradford A
£1,555.37 Bradford may have a further addition in some parish areas.

Chelsea Band D £1,643.44 Bradford D
£2,333.05

But how much is the house worth? And how much did you pay for it? Presumably there is a lot of unearned wealth there...

So I have to be responsible for the collective? How so? I pay enormous amounts, willingly, and still receive the same services as someone who has never paid anything at all.
If we keep putting more and more of the responsibility for “providing” on a smaller and smaller segment of society, where will we end up?

Income tax and council tax because I break even and I’ll never be in a position to worry about inheritance taxes or stamp duty and the likes.

Thinking about it, why isn't stamp duty like capital gains tax? Your main residence, fine. Anything else, tax.

Because the (adult) child inheriting still needs a house to live in, and would like to live close to their family.

Why should people in most parts of the UK be allowed to give their children the value of a whole house, but peopke in the SE aren't. They only get to give their children 3/4 of a house, which means the house probably has to be sold to pay the IHT. Oh, and then the kids also have to hand over a whole years worth of salary in stamp duty to be allowed to buy a smaller house with the proceeds. Completely artificial, and vile.

The residence nil rate band is £175k (residence left to direct descendant ) combine that with the £325 and for a married couple when the second person dies tax is paid over £1 milllion.

I don’t understand the IHT argument that people have made money via untaxed capital gains. Why is there a threshold if this is the argument? Shouldn’t everyone face IHT then? Someone making £150k wouldn’t be taxed on a gain if it falls under the threshold for IHT, but someone who has made a loss may be taxed because the threshold is exceeded. Why isn’t it proved that Mr ABC made money after mortgage interest, maintenance etc (on paper, my house has “jumped” but in real terms taking into account interest, stamp duty etc it’s worth less).

Nail on the head.

Very few pay IHT because most people undertake planning to avoid it. It's a kind of "Mug's tax" where only mugs pay it usually because they couldn't be bothered to plan and mitigate it. It's very easy to avoid in so many ways.

If we need to keep it, then we need a lower rate and lower thresholds. The whopping 40% above the thresholds is what causes people to plan to avoid it. If it were only 10%, it wouldn't be worth most people paying accountants and lawyers for advice and to set up trusts and other schemes.

We'd probably raise more tax if the IHT rate was drastically reduced.

Case in point was a client who'd previously been mostly IHT exempt due to the thresholds, allowances and business asset relief. Thanks to Rachel's changes to the business asset relief and pension fund values, he now has a whopping IHT liability. So has spent about £15k on specialist advice to reduce it back to zero. If IHT was only 10%, he'd not have bothered and would have paid a little more than that to the Treasury in IHT! Rachel would have raised more revenue by reducing IHT rates than making stupid changes to pension and business rules!

A bit like Gordon Brown thinking he was clever by scrapping tax credits on dividends, which has caused nearly 30 years of lost tax revenue because he didn't realise how much tax was raised in "advance corporation tax" which was paid by the company when a dividend was paid - not to mention it also screwed pension funds!

Want I think is unfair is that a person with no direct descendants does not have the £175K applied to their estate. As the nil rate banding hasn’t increased since I think 2009 this is clearly unfair for childless people.

I don't see the issue with that? If wealthy people buy expensive houses and pass them down to their kids, then tax will be payable on some of the wealth that is passed down.

Yes, the parents will have already paid tax on what they've earned - that is the same regardless of where they might be in the country. But what's the issue with taxing wealthy people a bit more once they're dead?

The kids who inherit enough to pay inheritance tax are already hugely privileged in comparison to their peers who don't inherit. They haven't earned that wealth in any way, so why shouldn't they pay tax on it?

My father's estate is very likely to be liable for inheritance tax unless it is all eaten up by care home fees first. He is not going to suffer as a result of paying more tax once he is gone, and my dsis and I will consider ourselves incredibly lucky to be in a position to inherit an estate that is worth enough to cross the inheritance tax threshold - why would we begrudge a portion of it going to the taxman? It isn't as if we have earned that money ourselves.

@Badbadbunny difficult to avoid if you don’t have any direct descendants and estate not entitled to the £175k allowance.

And what about the people who want to live close to their families but can't? Perhaps because their parents weren't wealthy enough to leave anything or because their estate got eaten up by care home fees?

And what about the immensely wealthy people who already have somewhere to live and then inherit vast sums from their parents?

It's a fair point that people these days actually need an inheritance in order to get close to the lifestyle of their parents because of things like house price appreciation.

Of course if house prices were cheaper and everyone could afford a decent standard of living without an inheritance, their would be no inheritance tax to pay in the first place. A nicely circular situation.

Personally I would prefer it if house prices were cheaper and people could afford a decent standard of living off the backs of their own earnings, rather than relying on inheritance to enable them to establish a family home.

That would probably result in people having kids earlier and increase the nations health as well.

Unfortunately we are in the situation at the moment where we are in a vicious cycle and probably not surprisingly the people who are better off as a result of that cycle are strongly resisting all change to it.

It will come eventually though, as the economy will eventually be destroyed otherwise.