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

And what about all the current retirees or over 50s who only worked p/t or never worked? I should have to work p/t & pay for childcare to boost the coffers?

Ive lost track of what any of this has got to do with the 10% inheritance tax
😵‍💫

You seem alarmingly/blissfully unaware, take your pick, of just how much of this country's essential services are run by volunteers. It is actually, potentially, unsustainable. The ones doing that volunteering are often the people of whom you speak (along with the young of course, who are no doubt being taken, hugely, advantage of). If they all returned to full time work, how much more money, do you think, it would take to fulfil the roles that were no longer being volunteered for? Would likely wipe out any tax funds recouped from this group.

1.7% of adults currently volunteer on a FT basis. 17% volunteer on a monthly basis. These percentages are far lower than the amount of people that are currently underemployed or unemployed.

What about all the people that work FT their entire working lives and retire at 68? Should they be taxed more to facilitate your choices? Genuine question. The slack needs to be picked up somewhere.

@Itchthescratchbut why would someone need to be taxed more to fund my choices? Again what is it i’m not funding myself? Just because someone is FT why does that mean they have paid more tax than me?

@Snoopymayhemme too & Im so confused as to why someone is paying more tax to fund me working p/t?!

Would that mean all inheritance including spouse to spouse? So you might have to pay 10% on your own stuff that was in your husbands name? How is that possible when you are one financial unit?

No
10% of half an estate x 2 is the same as 10% of the whole estate

You won’t have to pay it if your spouse passes and you live there and own it too
As with extg IHT the estate is taxed when the last one passes
( assuming there’s a will that passes it onto a spouse of course, just as the system now )

Agree - many people do part time because earn a lot. Once you reach a enough income to be happy you get better life balance by decreasing hours for the same pay rather than working FT for more money. I did that. Now I work 2-3 days a week and earn what I used to earn FT. I pay the same amount of tax but have for time with the kids.

@Lemonsqueezer12 well I would earn more f/t but the only people I would think are funding me is me pre dc and my DH 🤷🏻‍♀️

@Lemonsqueezer12and you are correct that we have “enough” so work/life balance becomes key. I find it odd that I should give that up to work f/t simply because the state needs more tax!

I think the idea is people who work part time or don't work aren't contributing to the economy and contributing less tax therefore, when they need care have paid in less than they could have done. So haven't paid into the "group project"

It's a logical conclusion of only seeing the world in terms of net (tax) contributor and net (tax) taker. It's the same mindset which causes some men (usually the ones who say they want trad wives) to despise the idea that a woman staying home has contributed to her husband's earnings when a divorce occurs. Because the world is split into those who provide and takers.

There's a wider argument about the care burden and how it isn't just represented in paid social care bills but also in unpaid work. And that it isn't just older people that need care but children. That's why countries like Nigeria which have a much younger population don't actually have a surfeit of working age people. They have about the same "care burden" as us but it's weighted towards under 18s not over 65s. And even here it needs to be taken account. You can't just focus on supporting the old. You need to support the young too (or there will be noone to support the next gen of old). And that might mean child benefit, it might mean paid childcare, it should also mean seeing the work of mothers (or fathers) do caring for their children as an important contribution towards the "group project" even if it's not economically measured.
Likewise actually carers earning 85 quid a week looking after a relative are saving the council an absolute fortune, not "economically in active" scroungers.

Yes, I am. And that means I won’t get one. But so be it. The state pension, which I too have paid into for decades, isn’t sustainable. You and I are paying for those people already taking it. There are not enough working people coming up behind to pay for us. The maths simply doesn’t work.

Likewise actually carers earning 85 quid a week looking after a relative are saving the council an absolute fortune, not "economically in active" scroungers.

This is a very popular view about "saving the council an absolute fortune" but is this true? Surely it's families responsibility to look after disabled or vulnerable? it's been like this forever, and still like this in many countries and cultures. It's only when there are no relatives the state should step in. If state supports you, then logically you have the final word. If it's state's responsibility and you support, then it's state's decision and you have no choice, so state can do whatever it believes is efficient, means the cheapest and not necessarily local.

As to economically in active scroungers - there are millions of them. Yes, some care for their children or elderly, but those who work full time do the same.

As to economically in active scroungers - there are millions of them. Yes, some care for their children or elderly, but those who work full time do the same.

It is impossible to work full time and look after someone with severe care needs. We aren't talking about people who need a couple of visits a day here. We are talking about people with severe illnesses or disabilities who require 24/7 care to be safe. People who will head bang themselves to the point of hospitalisation, people who will get up, wander, and fall, people who cannot eat, people who require equipment to breathe and who will die if that equipment fails. Seriously, educate yourself. These are the people who would be in expensive institutions if they did not have full time family carers doing the work for a pathetic pittance.

There are too many people on this thread who see the cost of everything and the value of nothing.

As to economically in active scroungers - there are millions of them. Yes, some care for their children or elderly, but those who work full time do the same.

And the sick and disabled?

Surely it's families responsibility to look after disabled or vulnerable? it's been like this forever, and still like this in many countries and cultures. It's only when there are no relatives the state should step in

How does this work in reality though? People are often spread out from their families due to work constraints & housing costs. People don’t have space to move an older parent in. How can people give up a job if they need it to pay their costs?

If you set up a £££ trust you have to pay the government 6% of the total held in the trust every 10 years as well as the cost of setting up the trust. Trusts aren’t the free piggy bank that most people think they are. The beneficiaries will also have to pay UK tax at the usual tax rates when they take any money out of the trust.

Also, if you put a property in trust during your lifetime, you may trigger an immediate IHT charge if it exceeds the nil-rate band.

I wasn’t aware about the 6% every ten years
That’s interesting

My cousin was thinking about the same
she doesn’t have large assets and I think it’s not cost effective
I’ll pass the 6% issue on to her
🙏

This
effectively the same money is being taxed twice which is grossly unfair.

I cant keep up with all the misinformation on this thread.

The over 70s in this country now pay more in income tax than those under 30.

There was no free childcare for todays pensioners and family allowances were considerably less than universal credit. The young now get more out of the system in benefits than pensioners received at the same age. The data are published somewhere, you'll find it if you look. Todays pensioners expected to pay for those older than them, they didnt expect help with childcare or rent but they didnt expect to be funding their children too.

Do you disagree with all IHT

not an attack or trick question btw, just interested

So who should pay for your social care do your kids can inherit hundreds of thousands? Lol

Then it's only fair that older people aren't directly charged even more to pay for their social care and, instead, this is taken of their estates when they die so the lazy entitled young people pay for it by inheriting slightly less.

In reality working out how much tax different groups paid at different ages is complicated because the way things are taxed is changed. I also think people look back to times when they were young (eg the 50s and 60s) when tax was very high but forget they wouldn't be paying much tax then as they either weren't working or were at the start of their career. What matters isn't just the tax rate at specific times but which tax band you fall/fell into. Benefits etc are also hard to calculate. How do you balance housing benefit against a rent controlled council house?

It isn't that surprising if under 30s now are paying less income tax than other age groups. Under 30s are either at the start of their career or in further education. And therefore in a lower tax band. Also there are less of them numerically (assuming you are only counting 18-30 year olds) compared to everyone over 65. If it's true that over 65 year olds are paying more in income tax than under 30 year olds then that all tells you is that over 65 year old have more income than under 30 year olds on average. So be happy 😊

Edit: for over 65 I should have said over 70. There are still more over 70 year olds than 18-30 year olds (under 18 year olds won't be paying income tax at all).