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

I completely agree @Kendodd. The “hardworking” cliche drives me mad. I’ve never seen anyone work harder than the care assistants who looked after my mum for minimum wage. Fat chance of them saving on the money they have to survive on.

YANBU. My assets are just over half that but I still think that’s unfair. £500k is too low in my opinion for one thing. A lot of people become accidental landlords when parents die so will quickly go over the £500k. Plus in London £500k will get swallowed up pretty quickly even if you don’t earn much. If they do this, I reckon that the threshold should be £1 million at an absolute minimum, probably more like £1.5m.

@Kendodd

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.

Thank you As someone who rents who could only dream of being given the mortgage amount for an average £500,000 home.

It’s not through lack of hard work. It’s through being with a cock womble in my youth and luck.

Income tax should probably start at a higher threshold too and be tweaked at the higher levels to balance that.

The tax free personal allowance has already doubled in the last 10 years. That's a massive leap and has taken huge numbers of low earners out of income tax.

Unfortunately, it's always the middle earners who bear the brunt of tax rises. Earn more than average, and you've income tax, NIC, student loans, workplace pensions. Earn more than £50k and you start to lose your child benefit and pay 40% tax. Earn between £100-£125k and you're paying a marginal tax rate (IT and NIC) of a whopping 62%, plus workplace pension and student loan deductions. (Which is why a lot of doctors and dentists won't do extra shifts that take their pay over £100k!).

It's a numbers game. There are huge numbers of low earners, so you have to hit the smaller number of above average/higher earners a lot more to compensate for the lower earners having tax reductions.

@Kendodd

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

I'd also reform the international tax havens so that footballers, pop stars, TV personalities, authors, Olympic athletes, Formula 1 drivers, etc., can't "move abroad for artistic reasons" to avoid paying UK taxes on income that they've earned in the UK.

You need to do that BEFORE you increase UK taxation, as all the rich would just bugger off abroad. Just look back at the 70s' when huge numbers of authors, singers, songwriters, etc left the UK to avoid the stupidly high tax rates. Nigel Mansell moved to the Isle of Man in the 80s as a self admitted tax exile. Lewis Hamilton bought his private jet via Isle of Man to avoid paying UK VAT. David Frost famously flew in and out of London every Sunday just to present his TV show, earning money in the UK, but not tax resident in the UK.

I wonder if theres a way to get some money out of pension firms to cover covid?

Most people who die from covid are elderly. More or Less (Radio 4) did a feature on it and apparently people who die from covid would have been expected to live, on average, ten more years. Pension firms must be quids in from this. Excuse my made up numbers for ease of maths but lests say 50% of those people had a private pension of about £10,000 per year. If they lose ten years of life, that £100,000 each, x 50,000 that's £5,000,000,000 pension companies are saving. Any way for the tax man to get some of that?

Can i just clarify (sorry it has been already) but from what I've read it's assets OVER £500k? Is that right? So if you had a combined wealth of say £520k you'd only pay the tax % on the £20k not the full amount?

That seems a bit fairer I suppose, as will account for south east house values/equity. A bog standard 3 bed family house is around £500k in my neck of the woods, most working families will have a mortgage on that and less likely to be affected.

I like the idea, but would be very surprised to see it implemented by a conservative government. Can we have it exponentially increased for second home owners and private landlords, please!

Heres a bit of information about council tax and how it hugely benefits the rich.

fairershare.org.uk/12-things-you-didnt-know-about-council-tax/

And a little video.

Try again

player.vimeo.com/video/410546330

[quote Kendodd]Heres a bit of information about council tax and how it hugely benefits the rich.

fairershare.org.uk/12-things-you-didnt-know-about-council-tax/[/quote]
Almost as if it was the product of a government that favoured the wealthy.

I'd also reform the international tax havens

We love it though and never miss an opportunity to suck up to billionaires.

www.independent.co.uk/news/business/news/uk-corporate-tax-avoidance-havens-justice-network-dodging-a8933661.html?__twitter_impression=true&fbclid=IwAR2efUEkdzNjHfnGDI4KLpEhxf1rRrFJ29KRB-GXd3iHho6ZShL7sNXama4

True, but it's not much in most places. My house is worth about $600k and the property taxes are about $9k.

So you pay 1.5% . I pay 0.2% in London. The amount of property tax you regard as "not much" would start a revolution if it was imposed here. People here have no idea what a real property tax look like, in terms of scale.

People here have no idea what a real property tax look like, in terms of scale

Likewise for stamp duty. People in the UK complain about stamp duty, but it's a lot lower here than many other countries, although some of the recent changes for second properties and higher cost ones might have changed the balance a little.

Surely like most taxes there is bands. So a house worth 700k would be liable for 5% of the additional 200 so 10k. If like someone mentioned above it would be paid 1% over the next 5 years. 2k a year. Yes its not great but its not undoable for even average earners. If you are living in a 700k house either you are either a) not an average earner b) been very lucky through inheritance or c) been very lucky with house price boom

I think this is a good way to go. I do think this wont happen though and as usual the poorest will be hit

@Kendodd

I wonder if theres a way to get some money out of pension firms to cover covid?

Most people who die from covid are elderly. More or Less (Radio 4) did a feature on it and apparently people who die from covid would have been expected to live, on average, ten more years. Pension firms must be quids in from this. Excuse my made up numbers for ease of maths but lests say 50% of those people had a private pension of about £10,000 per year. If they lose ten years of life, that £100,000 each, x 50,000 that's £5,000,000,000 pension companies are saving. Any way for the tax man to get some of that?

That is such a good idea! Really good, forward thinking. Probably far too forward thinking for this government, whose friends are probably rolling in the said pension funds...

Inheritance tax would be another obvious one...I'd rather see both these areas taxed more than a wealth tax or higher income tax, both of which punish people's hard work in a time when they might already be financially struggling due to covid.

Why wouldn't you tax the things that are biggest, and easiest to see?

I agreed we could tax property more.

It makes no sense to have another tax on pensions, when you could raise the same amount of money, from the same source, in a much fairer way, by simply increasing income tax charged on withdrawals.

[quote Kendodd]Heres a bit of information about council tax and how it hugely benefits the rich.

fairershare.org.uk/12-things-you-didnt-know-about-council-tax/[/quote]
It boils my piss😖🤬

I feel it's always going to be an uphill struggle to have a better tax system
because the people in charge of the rules are the very ones who benefit from the existing rules so they have no incentive to change them
of course we need to find a better way to redistribute the wealth which is hoarded by the people at the top but... people with power and money use their power and money to help them keep their power and money🙁

@Kendodd

I wonder if theres a way to get some money out of pension firms to cover covid?

Most people who die from covid are elderly. More or Less (Radio 4) did a feature on it and apparently people who die from covid would have been expected to live, on average, ten more years. Pension firms must be quids in from this. Excuse my made up numbers for ease of maths but lests say 50% of those people had a private pension of about £10,000 per year. If they lose ten years of life, that £100,000 each, x 50,000 that's £5,000,000,000 pension companies are saving. Any way for the tax man to get some of that?

That’s such a good idea. Far too sensible for it to happen, unfortunately.

I am a “ high earner “ living in London and own my house which is worth more than 500,00 however the only reason I was able to pay my mortgage off was by basically putting minimum 65 percent of my wages in to mortgage. It’s not a big house it’s a mode and 3 bed house with a modest garden but London prices.
I don’t have a fancy car - I don’t own an item of clothing over 20.00. I have savings which would have to pay it but I don’t think it’s fair no.

@Blackberrycream

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.

This is no use at all but I just wanted to offer a hug after reading that

All we can do is hope sanity prevails. I don't think MN is representative of the population.

Someone who inherits a 2 bed flat in London is vastly more wealthy than the majority. Just because someone's assets is tied up in what appears to be a not very attractive home, doesn't negate the fact that it is extremely valuable
So she should be made to sell her property to pay for the tax whilst someone with a property twice as big gets not to worry about losing their home!

A home is a home whatever its value. To force people to sell for a tax that affects only some because they happen to live in London rather somewhere cheap is bonkers.

If that's the case, make it a sliding rate. £500k in London, £200 in the NE. That would be fair.

Could be unfair on those in high value areas, where that home is their only asset. Why not a tax on second homes, buy to let etc, where it is clearly NOT a person's only home/asset.