Proposed Wealth Tax

[BootsieBarnes]

It's been discussed in the press that the Chancellor is considering a one-off wealth tax of 5% on assets over £500k. Allegedly this is being considered as part of the March budget to make a dent in the huge Covid debt the UK is facing.

So in real terms that would be a £25k tax bill for someone who has assets valued at £500k, such as property.

What do you think about this? would your family be able to swallow a tax bill that size?

I'm not doing any research, I just read that and thought about the impact it would have on families living in houses in that price bracket.

I've put on voting as well for interest. I'm not actually sure where I stand on this as I can see both sides, so this is just an arbitrary allocation just for voting.

YABU - people with assets that big should pay

YANBU - that would be unfair

If they need money then let's get unemployment down so more taxes being paid and let's get the economy going so people are spending money again.

Then only then when businesses are back up and their is growth start taxing people.

Taxing ppl when we are already feeling the squeeze isn't going to help.

And the companies who took furlough money should pay it bscm once they are back in profit...should only be fair that the government helped out in time of need and when the good times ar each, pay it back. Because had you not had that money the business could of completely folded. I dont know why that wasn't the case in the first place.

@hettie what isn't true?

The thing is, taking more and more off people, where is the incentive for people to work hard and to have something to pass onto their kids? I'm all for folk having wealth if they have spent their lives working hard, (often to the detriment to time with their families etc). It just seems like in this country the more you do for yourself the more that gets taken off you and the less you do the more you get given to you. As I say I'm certainly not a high earner, far from it however it must be frustrating for those who have hard earned wealth.

It certainly won't apply to the home that people live in. That would result in a high proportion of home owners in the south east having to sell up. It will be second homes only probably with so many exceptions that very few will end up paying anything

@evelynbeatrice yes exactly. We are "wealthy" and will get hit by this. However we make sacrifices daily to achieve our "wealthy" status. We buy nothing on credit, we shop to the offer, we put away loads in pensions, I buy nearly everything (and I mean really almost everything except food and underwear) secondhand on eBay. Now because we have been frugal we will be more screwed than the people down the road who have a wardrobe full of £1000 handbags and have been living the life of Riley!! Bit galling particularly with the rampant abuse of furlough schemes etc.

@BungleandGeorge

Personally think it should be all wealth considered. Why should someone with 2 million in 4 properties be hit more than someone in a 2 million pound property, or someone with a large pension or savings.

If the government would accept payment in the form of a corner of my front garden, then fine, take a primary residence into account

But including very illiquid assets like a sole family house the same way as cash in a bank account is clearly going to cause a lot of problems for a lot of people who don’t just have an average annual salary sitting idly by waiting to be taken as a new tax

The thing is, taking more and more off people, where is the incentive for people to work hard and to have something to pass onto their kids? I'm all for folk having wealth if they have spent their lives working hard, (often to the detriment to time with their families etc). It just seems like in this country the more you do for yourself the more that gets taken off you and the less you do the more you get given to you. As I say I'm certainly not a high earner, far from it however it must be frustrating for those who have hard earned wealth.

People don't get rich because they worked harder than others though. Lots of poor people work hard too. And people don't get rich in a vacuum either. Well paid people always rely a large number of badly paid people to keep society going. We all need the police, road maintenance, shop staff, cleaners in our workplaces, etc etc. There is a very large element of luck in being rich. The vast majority of the best off 10% in society have well off parents and have benefited from private education and inherited money. It is a bit stupid to claim that anyone who is rich is more deserving than anyone else

However we make sacrifices daily to achieve our "wealthy" status. We buy nothing on credit, we shop to the offer, we put away loads in pensions, I buy nearly everything (and I mean really almost everything except food and underwear) secondhand on eBay.

Sorry but you can't get rich only by buying things second hand. You must have some large income to amass assets worth over 500,000 other than one primary residence. Certainly in the top 5% of earners.

@SnackSizeRaisin agreed. You also can’t put “loads away into pensions” unless you get a decent income to begin with and have money over after paying basics like rent, food and utilities.

No one who's worked, home schooled or lost a job through this should be taxed a single penny extra.

IMO they should have been skimming 20% off all pensions as soon as the first lockdown started.

We would have to sell the house or increase our mortgage

If you have a mortgage you don't own the house though, the bank does. They will be highly unlikely to tax primary residences anyway. But even if they do, presumably you would only be taxed on the portion that is paid off.

Never. Going. To. Happen.

The rich will contribute nothing, relatively, more than the poor will to get us out of this mess. If anything less, as I imagine the average “rich” person has been impacted financially much less that the average “poor” person.

The millennials can just work until they’re 75. Easy.

The stories in the right-wing press have been planted to whip up opposition with false rumours, and clip the chancellors wings. Probably comes from more infighting within the government.

One article is in the Spectator, Buffoon's old employer.

You'll recognise the planted stories because they use the word "proposed" (no tax change has been proposed) and say it will be at 5% (the report does not say what the rate should be).

Lots of couples in London and the South East will be getting divorced for tax reasons if that’s really on the cards!

@gappyvalley That's a great idea. The govt can have the corner of my garden closest to next door

The proposal in the papers a few weeks ago was 0.48% of house value. But it would replace stamp duty and council tax.

So I'd be paying less as would many other people. How is that going to help?

We need enormous amounts of money to pay for this pandemic. Take out an interest only mortgage on the house or do some kind of equity release scheme.

Do you understand how equity release schemes work? Why should more and more people get into debt because they owe extortionate amounts of interest? With regard to interest only mortgages we had one at one point. It's no fun knowing you'll probably have to sell your home at the end of the term if you can't pay it off.

These ideas are coming from people with the money in the bank to pay, not those who'll have to take out loans or sell up.

@PigletJohn

The stories in the right-wing press have been planted to whip up opposition with false rumours, and clip the chancellors wings. Probably comes from more infighting within the government.

One article is in the Spectator, Buffoon's old employer.

You'll recognise the planted stories because they use the word "proposed" (no tax change has been proposed) and say it will be at 5% (the report does not say what the rate should be).

Oh. Starting to think the op is a plant. Screams of “whip up some anti-tax sentiment on MN”

Sterling work.

@mellicauli

Lots of couples in London and the South East will be getting divorced for tax reasons if that’s really on the cards!

Dh has already said this!

(Not over this 5% business ....)

@GarlicMonkey

No one who's worked, home schooled or lost a job through this should be taxed a single penny extra.

IMO they should have been skimming 20% off all pensions as soon as the first lockdown started.

Do you mean pension pots or pensions being paid out?

If it's pension pots then I'd reduce my payment right down to the minimum. I've worked throughout and taken a pay cut for the privilege. If it's pensions being paid out then just kick people while they are down. DH is semi retired but hasn't been able to work due to the pandemic and so has relied on his pensions only. Nice idea to take more from people when they can least afford it.

So people like my parents who bought their house years ago and are just finishing their mortgage ready to retire, will barely have a pension enough to live on would be expected to pay how? Work until their 80? They wouldn’t get a loan for that amount at their age.

@SnackSizeRaisin

It certainly won't apply to the home that people live in. That would result in a high proportion of home owners in the south east having to sell up. It will be second homes only probably with so many exceptions that very few will end up paying anything

According to the link it would apply to primary residences and would be £500k per person, that’s £1 million per couple. The inheritance tax allowance is £650k per couple and only about 5% of estates qualify for it. The demographic it would affect is London and the Home Counties.

I am definitely not a plant nearly spat my tea out at that!!! paranoid much?!?

@cyclingmad

If they need money then let's get unemployment down so more taxes being paid and let's get the economy going so people are spending money again.

Then only then when businesses are back up and their is growth start taxing people.

Taxing ppl when we are already feeling the squeeze isn't going to help.

And the companies who took furlough money should pay it bscm once they are back in profit...should only be fair that the government helped out in time of need and when the good times ar each, pay it back. Because had you not had that money the business could of completely folded. I dont know why that wasn't the case in the first place.

Furlough wasn’t by and large to prop businesses up, many would have just made people unemployed. You can’t retrospectively tax businesses for using furlough, furlough was there to benefit the employees as they would have been made redundant otherwise

Our house is probably worth getting on for £500k - lived here 30 years. We are also retired though so living on about £22 000 pa so wouldn't really be in a position to pay a huge tax bill. We're not even tax payers!

They can tax the wealthy in other ways. Stop all higher rate tax relief on pensions, reduce CGT exemptions, Reduce the annual allowance for pensions, make winter fuel benefits means tested etc etc.

@SnackSizeRaisin

However we make sacrifices daily to achieve our "wealthy" status. We buy nothing on credit, we shop to the offer, we put away loads in pensions, I buy nearly everything (and I mean really almost everything except food and underwear) secondhand on eBay.

Sorry but you can't get rich only by buying things second hand. You must have some large income to amass assets worth over 500,000 other than one primary residence. Certainly in the top 5% of earners.

Many rich people are normal people who have made huge sacrifices to accumulate their money. If you read 'The Millionaire next door' that will give you information on the reality of the lives of most rich people.