Jeremy Corbyn wants to impose lifetime gift limits on children of £125,000

[ForTheLoveOfDoughnuts]

So we pay tax on what we earn. What we buy. And now this.. what's the point of working hard to help out our kids, for this to even be considered. Or AIBU?

Yes I would support it. Yes I would vote for them. If I’m ever in a position to give my children ludicrous amounts of money, I’m more than happy for them to be taxed on some of it, particularly so if we have a Labour government who spend that money on stuff society actually needs (you know, rather than paying off far right political parties just so you can function as a government).

Boris Johnson literally said this week that he would cut tax for the highest earners, at a time when public services are in the toilet. All fine apparently.

Someone other than Corbyn wrote a report saying gifts over £125k should be taxed and Corbyn, Abbott et al are flamed.

I wonder what planet some people are living on because it can’t be the same one I’m on!

@sinkgirl
£125k isn’t a ludicrous amount of money though. It’s about 50% of the cost of an average house.

Its also worth noting that Boris tax cut is paid fot by increasing NI on everyone else.

For those in support of this proposal - I am wondering what level of tax on the money above the £125k threshold they would advocate. A genuine question. What do you think?

If this were to be a revenue neutral replacement for inheritance tax then it'd be a very solid idea indeed, no doubt about it. get rid of the ghastly inheritance tax planning 'industry' at a stroke, spread the overall tax burden round a bit more fairly.

mind you, this being jezza corbyn, i doubt that there's anything like even that single, unpuncutated, sentence worth's of logic behind the idea, it's much likelier to be a policy version of something he read on a lapel badge badge at a late 70s CND rally.

The resolution foundation suggested 20 percent.

So someone who recieves 150k would pay 6250 in tax, or an average tax rate of 4.1 percent.

The reason why I ask is, because the Government would need to make this revenue neutral. It would not get any money from getting rid of the "planning" industry. Indeed, it would lose income as the businesses fell, people would lose jobs and pay less in income tax.

However, what would happen, is the need for more civil servants within a Government department. This would cost money to set up and run. And yes these are jobs but these jobs need tax payers Monet to pay for them. As context DCMS has just over 1,000 staff and cost £159m to run. Of course it wouldn't take a whole department but this gives context of just how money would be needed to support this.

So coming to the straight maths of this proposal. An estate is currently charged at 40%. So lets take an estate of £1.5m. Lets assume that its a man who's wife has died and they have used the £1m allowance. That still leaves a treasury income of £400,000. Using this new system, if that man had 4 children they would each be liable on £250,000. To get the same amount back as the £400,000 from the system we have now, each of those people would have to be taxed at least 30%. (They would each be getting £375k, be liable on £250k and the tax shortfall would have to come out of that). So, how much more would it take for it to actually work and then generate money to "give to the poor". It would end up being a system that would hardly pay for itself very quickly and need more and more cash to sustain it. Its stupid, unworkable and just plays on people's perceptions that it would be hitting the big guys.

Someone will argue that its a never ending pot of cash as people will get multiple inheritances. Except most don't. And anyone who does will probably move away so the treasury will then get nothing.

Thats very different to the resolution foundation calculations.

Not sure you would need much extra admin as the current gift level is also monitored.

There is an argument for increasing IHT gifting allowance to 10k as the 3k figure was set in 1981 and this would be broadly inline with inflation.

As stated before the average median inheritance in 11k, most people recieve it between 55 and 64.

The "stealing from my kids" thing is just an appeal to emotion.

@rattusrattus20 This is not Corbyn's proposal.

Another one that can't be bothered to read before commenting.

How is this enforceable? What classes as a cash gift and what is just the expenses of raising your child(ren) eg cost of uni, driving lessons, savings when they are under 18?

If I’m ever in a position to give my children ludicrous amounts of money, I’m more than happy for them to be taxed on some of it, particularly so if we have a Labour government who spend that money on stuff society actually needs

Stuff society needs? We’d probably have very different opinions on what that ‘stuff’ is. You may consider it a ‘ludicrous amount’ of money, but I don’t believe the government is more entitled to my own, hard-earned money than my children. Vast amounts of money are consistently and arrogantly squandered and I have no intention of handing over any more than absolutely necessary. If there’s a loophole, you bet I’ll find it!

The "stealing from my kids" thing is just an appeal to emotion

No, it’s an appeal to principle.

It's not monitored. A GP gave my DC a substantial amounts of money towards something at Christmas. I didn't have to fill in a form or say they had received that money.

Different to the resolution foundation does not make them wrong.

And I am sorry but I am not talking about stealing from kids or most people won't be affected. This is the pure mathematics of making sure such a system is revenue neutral first and foremost and then ensuring it achieves its aims. It can't do either.

Fuck off magic grandpa

Was the gift over 3k? If it was, and not out of income? Allowances are made if you can give a gift out if normal income and it not effect your standard of living.

At the moment you wouldn't have had to fill in a form anyway, the GP would.

As i said your mathematics are different to what the Resolution foundation put forward.

It isn't an appeal to principle, at all btw. "Stealing from my kids" is emotive and in no way factual, or principled.

People with money in Sweden and Norway use plenty of ‘offshore solutions’ to avoid tax too. Just sayin’ ... and what otter said.

So they have tax avoidsrs but still manage a higher standard of living and to collect more tax as a percentage of GDP?

Must be a terrible place .

Who is magic grandpa?

Btw the model for this is the capital acquisitions tax in Ireland which works quite well. France has another model.

Zipee Sun 16-Jun-19 10:04:05
As I said, its a proposal and there are no actual workings of it yet.

"works quite well". How much does it cost to run?

Strong maths here. Strong maths

The capital acquisitions tax in Ireland works though doesn't it?

How this proposed tax would work in practice would have to be confirmed. The Resolution foundation in the report say that it wouldnt be "revolutionary in terms of administration" but it would require more work of HMRC.

There are recommendations in the reoprt on how to over come challenges but untill it actually becomes official policy there is no definate way of saying how it would work in full detail.

I

In your situation that you outlined above only 500,000 would be taxable at 40 percent? An estate of 1.5 million and the threshold being a millon.

This would give the treasury an income of 200,000. (40 percent of the total above the 1 millions threshold).

Under this scheme each child would recieve 375k and be liable for 20 percent tax on 250k.

Resulting in the same amount of tax being paid.

Have I missed something ?