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

@klh386

There's a reason why there aren't enough billionaires in the UK to pay taxes for shit like this. Taxes in the UK are unreasonable across the board and have driven them out. So someone with a modest 500k has to pay a fucking wealth tax. More mass exodus.

Where will they go?

As I said upthread I’ve never seen anyone work as hard as care home assistants on minimum wage. A lot of them had second jobs too

And a lot of people in high paying jobs started their careers by taking minimum wage jobs eg to pay their way through university. I worked as a care assistant while studying, it was intensely draining physically and emotionally. I did it part time for several years. It made me realise I wanted a job that was more mentally stimulating and less physically tiring, and obviously one that paid better.

Many of my uni friends also did care work, bar work, waitressing etc to support themselves at uni, without a ‘leg up’ from parents. They are all in high earning professions now too.

And a lot of the care assistants in care homes are actually fully trained nurses from overseas, waiting for their NHS pin no, then they go on to work as nurses here and often progress to senior roles.

And you had that option @HikeForward. Most of the women working in those jobs are middle aged with no qualifications. They don’t have that choice.

@klh386

There's a reason why there aren't enough billionaires in the UK to pay taxes for shit like this. Taxes in the UK are unreasonable across the board and have driven them out. So someone with a modest 500k has to pay a fucking wealth tax. More mass exodus.

please see figure 5

www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/bulletins/totalwealthingreatbritain/april2016tomarch2018#analysis-by-total-wealth-decile

At least 70% of UK residents would be overwhelmed and delighted to have your "modest" £500k

Especially as it falls inside the proposed scary allowance.

@VinylDetective Depends on what will be taxed. I'd have to check the specifics. For example, if the person is non-dom, it's worth evaluating whether it makes sense to move somewhere for ~6 years if the tax code is more favorable there in the relevant sense. We know people who have even moved to Europe for set amounts of time.

The message just caused me to panic a bit. I don't normally swear on here. Yes, I do agree that most people would be delighted to have 500k. I also agree with previous posters that many of the most essential workers doing the hardest work are rewarded with the least. It's just that there are so many not-so-sensible tax policies...for example, why on earth would you tax a person to repatriate funds back into the UK (meaning it won't be done) when said funds could be spent here?

Instead of just laughing, perhaps you could tell me about this extra high income tax band that I’ve somehow managed not to know about. I’m always happy to be educated.

@VinylDetective

Try this as an example -
Person A - earns £30000 pa. They pay £3500 in tax.

Person B - earns £60000. They pay £11,500 in tax.

Person B earns twice what Person A earns but pays more than 3 times the amount of tax.

NOT the same tax rate is it?

Its even less fair when you consider that a COUPLE on £30k pa each will take home £24,040 each after tax and NI (£48,080) AND still be able to get child benefit (if they have children) but a couple with just one earner on £60,000 will take home £43,440 and NOT get child benefit. So actually worse off.

Thanks @BuggerOffAndGoodDayToYou. I know there are two tax bands 🤷‍♀️ I was in the higher one for years. The child benefit situation is ridiculous, I agree. Despite not being affected I shouted at the radio when that was announced.

Wow, well if it's done on property our bill would be £100k plus.

Whilst we're not struggling I'm not sure we have £100k lying around.

We've already paid £140k ish in stamp duty to purchase. I didn't mind this, it seems absolutely fair that we have more and therefore paid more. And obviously we pay large amounts of tax through the normal system.

But an unexpected £100k might be a challenge.

Does anyone know if the proposal is all assets or just property?

@natalienewname

Wow, well if it's done on property our bill would be £100k plus.

Whilst we're not struggling I'm not sure we have £100k lying around.

We've already paid £140k ish in stamp duty to purchase. I didn't mind this, it seems absolutely fair that we have more and therefore paid more. And obviously we pay large amounts of tax through the normal system.

But an unexpected £100k might be a challenge.

Does anyone know if the proposal is all assets or just property?

No, nobody knows, because (despite the false story circulated by the Daily Express) there is no government proposal; no proposed tax band, and no proposed tax rate.

There is some information, and some illustrations in the report, which clearly states that the authors are not recommending any particular action.

It is useful to know that our current chancellor specifically said that he did not think the time was right for such a tax, and did nort think it would be right in future.

The Express published a false story intended to cause fear and alarm.

"Project Fear," as the Express likes to say.

Thank fuck my (tiny, 2-bedroom) house is only worth around £450k. I'm on a low income since DP died, and there's no way I could find, or borrow, £25k.

Finding £150 a month council tax is enough of a bloody struggle.

@BuggerOffAndGoodDayToYou

Instead of just laughing, perhaps you could tell me about this extra high income tax band that I’ve somehow managed not to know about. I’m always happy to be educated.

@VinylDetective

Try this as an example -
Person A - earns £30000 pa. They pay £3500 in tax.

Person B - earns £60000. They pay £11,500 in tax.

Person B earns twice what Person A earns but pays more than 3 times the amount of tax.

NOT the same tax rate is it?

Its even less fair when you consider that a COUPLE on £30k pa each will take home £24,040 each after tax and NI (£48,080) AND still be able to get child benefit (if they have children) but a couple with just one earner on £60,000 will take home £43,440 and NOT get child benefit. So actually worse off.

You haven't factored in NI, @BuggerOffAndGoodDayToYou. That's just a tax by another name.

@Whattheactual20201

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.

Exactly

You haven't factored in NI, @BuggerOffAndGoodDayToYou. That's just a tax by another name.

True but with NI you don’t pay a bigger percentage of your earnings as your earnings increase.

What if two people own a house over £500k, would their personal assets be valued at £250k and not have to pay?

@squiglet111

What if two people own a house over £500k, would their personal assets be valued at £250k and not have to pay?

They’d have an allowance of £500k each, so £1 million between them.

If they’re looking at taxing property then the first port of call can be investors, especially overseas investors with no other tie to the uk. There are entire developments marketed towards investors rather than occupiers here in Manchester.

Nobody asked for this ridiculous increase in house prices.

I’m not coining it in from my house rising in value since I live in it. If I move it will be to another house in the vicinity. So all I care about is my house keeping aligned to all the other properties around here and whether I can afford mortgages. Whether it’s valued at £50,000 or £5,000,000 is irrelevant outside those two considerations. Add in a deposit as no. 3 for first time buyers.

Apart from that, as one poster said, they’re just numbers on a page.

This aspect doesn’t anger me as much as the idea of including pension pots, however. Given how difficult it is to amass meaningful sums in a pension pot, these should be exempted or subject to a separate limit. I can easily imagine how you’d hit the limit due to property values and end up taking the hit on a pension pot which would yield a few thousand quid in annuity. Hardly riches untold.

Umm, are you sure?Because if you are, a LOT of top rate tax payers are due a big refund
Some people really don't have any notion of taxation and just have vision of people with a higher salary or bigger asset with cash flowing around them not knowing what to do with it.

That might be the case for the very very wealthy, but it's far from the case for many who happen to own a house worth £500k.

@dontdisturbmenow

Umm, are you sure?Because if you are, a LOT of top rate tax payers are due a big refund Some people really don't have any notion of taxation and just have vision of people with a higher salary or bigger asset with cash flowing around them not knowing what to do with it.

That might be the case for the very very wealthy, but it's far from the case for many who happen to own a house worth £500k.

who, if the Express story was true (it isn't) would scrape in at about the lower limit.

@user1467048527

Just numbers on a page if you are already on the ladder. Not for young people and renters, for them it’s a huge barrier. A property tax would lower house prices for everyone.

In one way, the tories can’t afford to do this.. but in the long run they need some sort of regular property tax to keep values from rising and rising otherwise they will never win an election ever again because no millennials (and younger) would vote for them. It reminds me of “right to buy”.

How many votes would they actually loose from doing this anyway. Tory voters would just think that property taxes would be much worse under labour. I don’t think they would do a one off like this but 0.5% a year sounds very likely to me.

I voted YANBU:

Government have wasted BILLIONS on Test & Trace, HS2, etc.

Why should we alI pay for the government’s financial ineptitude?

Apart from that I can see where the wealth tax is coming from. It’s just bloody rich coming from this particular spendthrift government.

Government have wasted BILLIONS on Test & Trace, HS2, etc
you say wasted but they have funelled it into the pockets of their wealthy friends & backers....they dont consider that a waste
more like 'job done' :(

We should be taxing the things we want people to do less of. Taxing wealth hoarding instead of taxing income. We want people to work harder, and we want people to spend their money (beyond a reasonable amount set aside for emergencies etc) so tax wealth rather than (not as well as) income. We want people to own a home, but not to hoard housing, so tax second properties, not first.

@adriennewillfly

We should be taxing the things we want people to do less of. Taxing wealth hoarding instead of taxing income. We want people to work harder, and we want people to spend their money (beyond a reasonable amount set aside for emergencies etc) so tax wealth rather than (not as well as) income. We want people to own a home, but not to hoard housing, so tax second properties, not first.

This is true but the people who so are holding the wealth are also the ones who make the rules And those turkeys don't vote for Christmas