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

That's a good idea, but our council is so low on resources that it's general housing is oversubscribed, council repairs are ofter repeatedly done as a quick fix that fails and needs to be done again, mental health and adult safeguarding referrals are rarely accepted or quickly closed without resolving the issues, we have no hostels for the homeless and those that don't have priority need are signposted to the streets without so much as a tent.

Would I trust that same council to have the time and resources to check all their care homes and get them to a consistently good standard?

No, I would rather sell her house and find somewhere myself so that she is happy and well cared for.

I don't think it's generational. My 90 year old grandma who dragged herself out of poverty begrudges those who don't even try to be financially independent. When you have made huge sacrifices and always tried to do the 'right' thing to be a responsible member of society then it can feel like a huge slap on the face that other people can just opt out of this and rely on the state (i.e. the rest of us) to fund what ostensibly seems like a similar standard of living.

In a way, society and the welfare state is like the biggest group work project ever assigned. We all have to work together to achieve the best outcome as a collective but people will naturally resent those who don't pull their weight and by default then act as a burden for the rest of the group.

That’s a brilliant summation - group work!

fwiw my dcs detested group work. I just can’t fathom why anybody thinks it’s a good idea. You get the grafter, the can’t-be-bothered-one, the I don’t understand one and the my way or the highway one.

How things are at the moment, families in the thick of supporting a parent sinking into dementia are clearing and selling that parent's house for funds that may or may not cover the cost of keeping them safe as they slowly die.

None of this is nice to go through, it's all difficult, but at least a 10% bill afterwards would be predictable and able to be planned for rather than limitless ongoing costs at a time a parent is dying.

You yourself have a spare house and several options open to you; that you choose not to exercise them is entirely on you.

Under the current regime (given that soon many more people will be brought into the IHT fold when private pensions are counted in for IHT), many kids inheriting will have a large tax liability with no immediate means of paying it - since getting probate takes so incredibly long in England and inherited assets such as a house cannot be immediately realised into ready cash. But you can insure - the parents can pay for an insurance policy that the inheriting kids can use to defray IHT. Pricey yes, but only the most wealthy will need to pay for it till end of life - the rest can stop it or pay for lesser cover as they get older and they are eating up their funds leaving less to inherit.

Presumably similar insurance products will be available for future changes.

Yes, it's like a microcosm of society and really the best hope that the whole group often has of achieving the best collective grade is if the grafter will step up and compensate for all the other team mates. To expect them to do this without complaint though is completely unrealistic.

I also find it bizarre that we have all worked in teams in our lifetime. We all know there is a decent proportion of lazy people looking to do as little as possible and to get the maximum benefit for themselves. As you suggest, in a class work project group with about five people there is always at least one. These people don't just disappear when it comes to the welfare state. They still exist and yet many people act as if their existence is some malicious lie dreamt up by the right wing. I have friends, family and colleagues like this and I imagine almost everyone does. In a way it's a pretty efficient and clever survival technique and the mugs that graft endlessly to compensate and fund them are the fools.

@Itchthescratchwhy I said generational because the conversation often come up when discussing pension credit & care home fees. younger generations are more used to means testing perhaps? eg child benefit/family allowance used to be universal, now it’s means tested. Social housing far less common now vs the past etc

Like I said I never spend 1 minute of the day thinking another family may be getting extra childcare hours or universal credit which are things not available to me.

I fully expect the state pension to be means tested by the time I need it. Triple lock& winter fuel will either not exist or have a very low threshold. Again I find it bonkers that some would stop saving for a private pension because of this

Yes, it's like a microcosm of society and really the best hope that the whole group often has of achieving the best collective grade is if the grafter will step up and compensate for all the other team mates. To expect them to do this without complaint though is completely unrealistic.

It's even better than this - the grafter doesn't pull up collective grades, but the grades get averaged. So it's not like the grafter gets 9s and layabout gets 3s, they both get 6s. This is how UK currently works.

A lot of people can only afford to save a very small amount for their pension if any, obviously you are not one of these people and will probably end up with a stonking great pension so will not need a state pension

There are no plans because he isn’t in post.

@Sesmaso you are in favour of means testing the pension? It’s a decent pension in part because I paid in from. very young age & continue to do so.

Importantly the grafter must be gaslit into believing that they are actually privileged to be able to work as hard as they do. If they dare to get any recognition for their hard work then the different grades will be flagged as a sign on inequality and automatically deemed to be unfair and a specific percentage should be removed and given to students with lower marks. No discussion about why the student got the lower marks is allowed. We must assume they have tried their absolute best and the grafter is a terrible human for wanting to retain more of their grades for themselves.

It' more like a group project which goes on for decades. With everyone doing different roles at different times. If you took a snapshot just of today all the people over 65 would be the coasters, the ones not fully contributing and expecting to be carried. However if you took a longer view you would see that they had been doing some of the work earlier on. It's also complicated by the fact that not all the tasks are the same but everyone relies on the fact other people are doing different things. One person pays more tax and the other does important care work. The rewards aren't the same either. The higher tax payer gets more stuff than the care worker. This is because we live in a capitalist society not a communist utopia. So already the group project isn't fair.

Because it's so complicated you have a sit where lots of people think they have contributed more than they have relative to the rest of the group. Eg the people no longer working might believe they contributed "enough" but because the workload of the project has increased they actually haven't. This breeds resentment that the people currently working on said group project aren't working hard enough or must have some slackers among them. Or people don't realise the value/effort of jobs different to them. So the higher tax payer resents the care worker for "sponging" because she lives in social housing and will need assistance paying for care in her old age.

Complicated by the fact in the 80s a lot of people were going around saying there is no such thing as a group project and that actually the important thing is to hoard as many glue sticks as you can for yourself. So now all the younger people who need glue sticks don't have the glue sticks they need to contribute to the project. And are being called lazy by the people sitting on piles of glue sticks that they refuse to share.

@Persephonia1966agree

Exactly

So I think I would be a grafter in the below scenarios but a large part of why I am where I am is because I was helped onto the London housing ladder. My aunt wouldn’t be classed as a grafter - didn’t work much & now gets AA & a state pension. But she was married to a grafter. She regularly sends me money because she doesn’t really spend it and doesn’t know what to do with it. It’s complicated!

@Persephonia1966

This breeds resentment that the people currently working on said group project aren't working hard enough or must have some slackers among them. Or people don't realise the value/effort of jobs different to them. So the higher tax payer resents the care worker for "sponging" because she lives in social housing and will need assistance paying for care in her old age.

I disagree strongly. I don't believe there is a single higher tax payer who resents a care worker. I believe most will agree that care workers need to be compensated much better. What high (and low) taxpayers resent is millions of people not doing any work at all, or minimal work, whilst being funded by these taxpayers.
The stat is that only 30% of UC recipients are in any form of employment, and this includes even minimal part time employment. So let's don't pretend it's about low paid jobs, it's about 25% of economically inactive working age population.

Ok. So if not a care worker, what about a carer? What is different about those two roles (except pay).

I disagree strongly. I don't believe there is a single higher tax payer who resents a care worker. I believe most will agree that care workers need to be compensated much better.

What high (and low) taxpayers resent is millions of people not doing any work at all, or minimal work, whilst being funded by these taxpayers.

Why would some of the above not be care workers?

The stat is that only 30% of UC recipients are in any form of employment, and this includes even minimal part time employment. So let's don't pretend it's about low paid jobs, it's about 25% of economically inactive working age population.

Doesn’t the above include students, the sick, disabled & carers?

This is a good graphic to show the economically inactive. One thing to note that the consequence of increasing the state pension age means more older workers fall into the economically inactive category now due to increased ill health.

I worked throughout uni except for the period of my final exams & the summer after. Presumably I would have been counted as economically inactive for those few months.

Currently if you can’t pay the IHT
( which has to be paid to get probate) you can
get a loan from providers that specialise in this area
or
if your credit is bad
the Govn give you a loan
All with interest added of course.

The other thing about the group project analogy and people not contributing enough is it directly contradicts the original point being made - that it's unfair for people to have tonpay additional money/tax for old age care. Someone who worked and paid taxes their whole life likely did NOT pay enough into the system to pay for their care in old age. Therefore you could argue if we support them (rather than just letting everyone die 5 years after retirement or if they can sell their homes to support themselves) they are the very coasters on the group project being decried. This.would be wrong, because those same people did in fact contribute to the project in good faith in years earlier. It's not their fault they didn't contribute enough. So the IHT tax idea allows them to receive the support they need and takes payment later. It's win win. Yes, their children might receive 10%less than they would have. But I don't think group projects allows you to pass on your share of the resources (the nice pens, glue sticks, scissors) to your descendants anyway. So we already aren't in pure group project territory (which would be Marxist communism which doesn't really work.)

I think it’s a good idea for everyone to pay 10% personally.