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

"It’s really easy to move properly under the ownership of trusts, companies or individuals based offshore so don’t think you actually have to move the physical asset."

You are assuming that property in the UK would not be subject to UK property tax.

I think that's a leap of the imagination.

[quote AlwaysLatte]@VinylDetective I disagree. We are spending huge amounts of money because the government first of all tried to destabilise the NHS even before the pandemic was heard of, they didn't make preparations for this inevitable scenario, despite top scientists telling them it was very likely, and even after it all happened, they didn't listen to the scientists, didn't look at what more successful countries have done, and at every opportunity they have stalled their decisions so that the horse has bolted every time. They ARE responsible for billions, even though yes it would have been costly anyway. But nowhere near this costly.[/quote]
I agree with you about the state of the NHS, ironically if this pandemic had hit ten years earlier we’d have been far better prepared. Unfortunately, we are where we are and it has to be paid for. I anticipate that income tax will increase, despite the Tory manifesto promise, we’ll all have to pay it.

Apparently only about 3% of houses in the UK break the £1 million barrier so even if a wealth tax were introduced at that level most households wouldn’t qualify on that measure. Pension pots are a different matter I imagine but most ordinary people, as opposed to wealthy people who think they’re ordinary, wouldn’t be impacted.

@PigletJohn

"It’s really easy to move properly under the ownership of trusts, companies or individuals based offshore so don’t think you actually have to move the physical asset."

You are assuming that property in the UK would not be subject to UK property tax.

I think that's a leap of the imagination.

I’m just saying I wouldn’t be surprised if there were ways of avoiding a property tax that didn’t involve moving the asset. Cleverer accountants than me will work something out I’m sure

[quote Marinaloves]@Sixgeese
So say your house is worth 650k you paid 350 profit of 300k
You will have to pay £7,500
Are you actually serious that you can’t afford that with roughly 300k sitting in profit. That’s considering you have a mortgage of 350
If you’re actually sitting on 650k then are you seriously saying you couldn’t afford 7.5k to save our country and it not be totally fucked up for the young[/quote]
My property is worth just over £500k but has lost value since Brexit. I had it valued last year.

Since you seem to have all the answers and a major chip on your shoulder about people whose homes are in this bracket how would you recommend I am treated. Should I be hit twice?
Oh and it's a one bed apartment but the way.

Perhaps some of the companies and individuals handed vast sums without a clear tendering process and who delivered nothing very much might hand some of their new found wealth back?

Perhaps some of those who have profiteered through lockdown could pay business taxes in this country. Rees Mogg comes to mind.

Perhaps that £350 million a week from Brexit could help?

"My property is worth just over £500k but has lost value since Brexit. I had it valued last year."

You will be shocked to hear that a lot of us have been hit by Brexit as well as by the virus.

You do not say when you bought your home, or how the price has changed since then, or if this is the first home you have ever owned.

If you are hoping to be told that the wealthier members of society should not be expected to contribute more than the less wealthy, you are doomed to disappointment.

Look on the bright side, though.

Apart from a scare story intended to marshall opposition to taxes on wealth, there is no particular prospect of it happening.

It won't happen. People are already on the brink of rebellion and even some of the wealthy have lost money due to Covid.
Our DC would be getting early inheritances if it was the case or we'd put our properties in trust.
The tories will do anything rather than unfairly tax a huge section of their voters.

You could remove the word "unfairly."

And the word "huge."

If you’re actually sitting on 650k then are you seriously saying you couldn’t afford 7.5k to save our country and it not be totally fucked up for the young
So my single mum friend of two little ones who has been furloughed since March, who inherited a 2 bed flat in London from her grandmother when she died of Covid should have no problem finding £7500? What planet do you live in?

It was mentioned by a pp and it’s an important point that income/ inheritance etc should be taxed once. After taxation, anything else is personal choice and some are savers not spenders.
Double taxation distorts people’s behaviour and is a disincentive to save so an own goal for any government. It’s also a dangerous precedent to set. Will it really only be a one off once that boundary has been crossed? That is very naive.

@dontdisturbmenow

If you’re actually sitting on 650k then are you seriously saying you couldn’t afford 7.5k to save our country and it not be totally fucked up for the young So my single mum friend of two little ones who has been furloughed since March, who inherited a 2 bed flat in London from her grandmother when she died of Covid should have no problem finding £7500? What planet do you live in?

This is a prime example of what I meant when I said wealthy people who think they’re ordinary.

Can you not see the irony of someone living in a mortgage free £ million property who’s been living on tax payers’ money for ten months pleading poverty? She could pay with the rent or mortgage payments she made before her inheritance, couldn’t she?

@ Barbaraof Seville
Some of that isn’t worthy of comment so I won’t bother. You’re the one who needs to look outside your bubble. Fucking nasty.
A terrace house is still a terrace house. It might have gone up in value but no good to me as I still need to live in it and house my children.
This thread has been an eye opener.

@Blackberrycream

It was mentioned by a pp and it’s an important point that income/ inheritance etc should be taxed once. After taxation, anything else is personal choice and some are savers not spenders. Double taxation distorts people’s behaviour and is a disincentive to save so an own goal for any government. It’s also a dangerous precedent to set. Will it really only be a one off once that boundary has been crossed? That is very naive.

The government doesn’t want people to save. It wants us all to get out there and spend to stimulate the economy.

No money is taxed just once. All the money that passes through our hands is taxed multiple timed - you fill your car with cash you’ve paid income tax on, then you pay VAT and fuel tax on the petrol.

We’re all going to be taxed a lot more now. Taxes have been kept artificially low for so long it’s going to be a hell of a shock, I know. You’re going to have to get used to it.

@Blackberrycream

You're pushing the view that the wealthier members of society should not contribute more than the less wealthy.

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.
What press?

Well it would be a good bit better than hammering the poor, especially the disabled and poor children (see cuts and 2 child policy and rape clause).

They've been doing that for the past decade, to pay for 'austerity'.

Those with more should contribute this time.

Countries with higher taxes have more equal societies, better health care systems, and better quality of life for everyone. The Nordic countries for example. I think we in the UK should be facing up to this, I agree taxes have been kept artificially low.

A terrace house is still a terrace house. It might have gone up in value but no good to me as I still need to live in it and house my children

Someone who has seen their property appreciate to million pound levels has the option to move to other areas of the country and release enough tax free money to pay their living costs for decades.

That is not an option to people who already live in areas that have not seen massive growth in prices. Someone upthread said their house had tripled in value in the last 15 years. In some places prices have barely moved at all, or are actually lower, so people are in negative equity.

@DynamoKev

The Daily Express, primarily.

And their article is incorrect.

[quote PigletJohn]@Blackberrycream

You're pushing the view that the wealthier members of society should not contribute more than the less wealthy.[/quote]
Not really.
There are good reasons why this idea has been abandoned in other countries though. The reasons are out there.
Vinyldetective is right about the double taxation on goods. VAT has always unfairly targeted lower earners and should be looked at. Income tax should probably start at a higher threshold too and be tweaked at the higher levels to balance that.
I think a lot more than taxation would need to be addressed before we could aspire to a Nordic model.

Seriously @BarbaraofSeville
Firstly, if you’re single, you get half the allowance so not a million.
Secondly, you propose I sell my house in a city, uprooting my children, moving them from their school, and move to another town away from friends and family. Probably a place less ethnically diverse as well. There is a reason we settled in a city. Why the hell would I do that to my children.
I’ve actually been really upset by your posts in a way I have never been before on this site. I really don’t want to talk about personal circumstances as it is too outing but your attitude is really nasty.
Thanks everyone else for the discussion.

People work hard and save all their lives then useless spendthrift politicians who can’t manage the books punish them for it.

Can we please stop with the 'worked hard all their life' bollocks. So what! Most people work hard all their life, there's nothing special about it. If I had to bet I would put my money on there being absolutely no relationship between hard work and wealth, poor people probably work just as hard as rich people, in fact I would guess they work harder.

One thing I'd reform is the Trust systems so you can't hide money in trusts to avoid tax. Shameful behaviour.