What do you think of Burnham's plans re inheritance tax?

[JoyousOpalLemur]

He has said in the past that he wants to abolish inheritance tax and replaced it with a social care levy on inherited assets, which will incorporate unused pensions.

I don't totally understand this if I'm honest - I think it means everyone will be dragged into the inheritance tax threshold, but it seems like a fairer tax than what currently exists, and it's there for a purpose (to fund social care).

What do you think?

https://www.independent.co.uk/money/burnham-prime-minister-money-taxes-mortgages-bonds-stamp-duty-b3001078.html

There isn't a proposal, that's the thing, this is all based on things Andy B has said in the past, one line comments, there is no nuance to it or even an outline idea. We don't know if it's still on his radar or agenda and the fine detail, if any exists.

brilliant. So you don't pay, enjoy your life, spend it all, need care in old age but have no funds. Do you think UK will leave you to die on a street? someone will have to pick a tab. Those mugs who paid in.
That's why this has to be a compulsory levy. But as you can see above, posters aren't happy with this 10%. Imagine how those who have to pay 40% feel. And they are the most likely to have to self fund.

@DeftWaspwell I meant the comments etc

I'm not a Thatcher fan, but she got this right when she said:

"The problem with socialism is that you eventually run out of other people's money."

Labour is just take, take, take, waste, waste, waste then take some more, until, eventually people realise they are being taken for mugs.

I don't think we have any more info than the very brief one line comments he made, nothing specific has ever been mentioned.

and yet there are nearly 300 posts on a thread about his “plans” 😆

I agree
But believe me
They do moan about all services and the lack of benefits

Labour is just take, take, take, waste, waste, waste then take some more, until, eventually people realise they are being taken for mugs.

This isn’t any different to what the Tories did imo

I think there should be a point at which you don't pay tax - a 'fair' amount that you can leave your kids, tax free. Like the value of the average 3 bed UK semi, for example. People have worked and paid tax on the income which bought the house, stamp duty etc. There should be an entitlement to pass on some of your assets to your kids. Beyond that, it seems reasonable that some version of tax on unearned wealth is paid and the money ringfenced for the purpose of caring for the elderly, not just thrown in the general pot for a future govt to spunk up the wall on a war or some other shit spending decision of which there seems to be many, despite all governments whinging that they have no money

Burnhams favoured ‘Fairer’ organisation have thought it out though
Including the maths

It would take a Solomon to solve this one. With a care levy, if you will, still some will be paying in nothing.

And the focus is always houses. I suppose because they are literally bricks and mortar, there for all to see. If I buy multiple diamond necklaces, no one is to know if I’ve passed them on to my heirs.

As a pp said, you need to think what the effect of a policy is on human behaviour. Increase inheritance tax and people will spend/give away earlier. Meddle with pensions and people lose confidence and are loathe to save. Land value tax? People will see no point in maintaining their properties if they can’t pay it and a lien will be put on their house. I’m not going to get replacement windows if, say, £10k per annum which I can’t pay is being rolled up from LVT plus council tax. Sell then! But no one’s buying with that millstone cost. Reduce the price! But then next owner will argue for a lower LVT to be levied, thus exchequer losing out.

The problem is it would have to be a lot per year to actually be enough to fund people in their old age. And most people don't have massive amounts of cash they don't know what to do with. The other posters comments about the squeezed middle is true. I think Theresa May tried to raise something along those lines as an idea but it was attacked and dropped and the can got kicked down the road.
Even NI is an issue in that if it's meant to pay for the state pension and healthcare it's far too low. But the governments quite modest raise to the amounts employers paid has been blamed for hurting the economy. Raising the amount people pay or adding a while.other tax will not go down well. See some of the posts on this thread or the rest of Mumsnet.

There is a figure
The current sun is enough to bury you

Yes, but they had thought out the land value tax idea, and it was highly speculated that Rachel Reeves would implement that in her first budget - it didn't happen, it was also speculated the RNRB wold go, it didn't.

There are lots of ideas out there, but I think Mr Burnham is clever enough to realise that just implementing ideas that ultimately hit the tax payer again is not going to make him popular.

That's not to say these ideas are bad ideas or don't have good points, but they need properly laying out and implementing and most importantly results need to be seen for the £ spent - otherwise he will be out pretty quick.

The focus is on houses because that is where the vast majority of the wealth is & for many the wealth is due to huge equity gains.

@Aiming4Optimistica married couple can leave up to 1m to their dc free of tax…

That I didn't know - prob cos I don't have 1m to leave my kids!

IHT doesn't hit the taxpayer

The current system does hit tax paying pensioners though

If they don’t go into care! The pil both had dementia. That’s two x about five years each in (very ordinary) care home. Savings and (small) house all gone until fil died a week before hitting £23k threshold.

Also fgs not everyone has “unearned wealth” in their homes. My house has barely increased in value since I bought it. There’s a shrinking pool of those old enough to have bought their homes for 83p in 1975.

Well it does, it will hit me under Burnham's proposals, it hit farmers and small business people. Its not all as cut and dried as it being someone else's money and they are dead, in my case it will be my home and money that's already mine that will be taxed where it is not now. And as that's not liquid assets it will either force me to evict a family or close down my business and live on benefits.

How will it hit you
When you are dead you are no longer a tax payer
At that point your estate is charged. Not when you are alive

@Aiming4Optimisticits surprising how many don’t seem to know that.

As someone who's parents have already paid 100s of thousands of pounds due to being unlucky enough to get dementia, I'd fully support this (though it will come too late to help us).

Health costs are spread across the whole population, not just those unluck enough to get ill, so care costs should be too.

@MaturingCheeseballI never said everyone did but many do have unearned wealth in their homes although I am happy for you to provide figures proving me wrong?

@JacobolordyI agree