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Original poster

Proposed Wealth Tax

769 replies

BootsieBarnes · 30/01/2021 16:11

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

OP posts:
MarshaBradyo · 03/02/2021 17:36

@XjustagirlX

But people in the SE will only have the charge if their home is £1million mortgage free! I think people on this thread still don’t understand that the mortgage is deducted. If someone in the SE has £1 million home mortgage free they are wealthy and should pay.
They don’t necessarily have savings ready to hand over.

Eg house has gone up over a long time 30 years or so, retired or low income. Is not unusual here.

woodhill · 03/02/2021 17:36

@XjustagirlX

But people in the SE will only have the charge if their home is £1million mortgage free! I think people on this thread still don’t understand that the mortgage is deducted. If someone in the SE has £1 million home mortgage free they are wealthy and should pay.
Fair enough but not at 500K, it is nothing in suburbia
MarshaBradyo · 03/02/2021 17:36

@XjustagirlX

*Many people in our street who bought 30 plus years ago. They are not high earners at all. Far from it.

But houses have gone up. They couldn’t afford it. Nowhere close.*

But they have benefitted from a massive property boom and therefore are incredibly fortunate so should help get the country out of the financial mess it’s in.

By selling their family home? That’s a big ask

Do you feel up to it?

Notcontent · 03/02/2021 17:39

@recluse - I agree.

I am a lone parent earning on ok salary but not rolling in money. My tiny house in London is worth quite a lot but only because of its location. I have saved and been really sensible with money since I got my first job, but I still have a massive mortgage that I might not be able to ever repay in full. If I was presented with a large bill I would have to sell. I could not borrow the money as I have no means of paying it back.

In my street there are lots of elderly people who own small houses like mine, often very modest and unmodernised. They have no money. What would they be expected to do?

woodhill · 03/02/2021 17:39

How about rich corporations help,the country and the so and so who got a backhander for endorsing the HS2

Lulu1919 · 03/02/2021 17:42

@Kazzyhoward

Any wealth tax on property is always biased against the south east.

Is it? Presumably property prices in the SE are high because of higher than average earnings compared to cheaper parts of the country. So, the people in those areas are earning more to be able to afford to pay more.

I'm a TA in a very expensive area to buy My wage is no more than a TA Up north We started our mortgage 30 plus years ago Paid off now through hard work Bought house for £80000 we've upgraded added on a loft conversion etc over the years but it's now worth about £400000 £430000 We couldn't possibly afford to buy it at that price now...we'd never get a mortgage on what we earn !!
XjustagirlX · 03/02/2021 17:42

@Blackberrycream the problem with just increasing the rate of IHT is it is really easy to avoid paying any IHT do the government wouldn’t get the revenue if they did that.

Using your example, assuming someone is moving house without taking out a mortgage and wants to buy an equally valued house, they will always have to buy a slightly cheaper house. As they will have to pay SDLT, legal costs and moving costs. This wealth tax would just be another cost to moving (assuming the wealth tax was paid on sale if they didn’t have the cash upfront).

I do take the point that it may be a forever tax instead of a one off.

woodhill · 03/02/2021 17:44

Wages have stagnated anyway

VinylDetective · 03/02/2021 17:45

Obviously you can’t spend bricks but would you be happy to defer the bill until you sell or die?

I’d be happy for it to be paid when we die. Until the house is sold the money doesn’t exist. Like I said, it’s fairy money until it’s liquidated.

XjustagirlX · 03/02/2021 17:46

@MarshaBradyo but why can’t they just pay when they do eventually sell? The gov won’t make people sell their homes

Blackberrycream · 03/02/2021 17:47

@XjustagirlX
Yes, people do understand.
My sister in law is not wealthy though.
Her mortgage is paid as she has worked for years as a single parent and nurse paying it.
She lives in a run down house in SE London. If you walk around the neighbourhood you see the juxtaposition of more recent incomers with their side returns and improved properties.
Her children are born and raised there and would like to stay. Can you start to see the problem?
I can see similar problems in a few years with friends considering a right to buy on the estate they have lived on for a few generations. Guaranteed it will be seen as desirable in a few years as it is close to a city centre ( although people don’t want to live there right now). Will she be wealthy or will she still be a care worker in the same home?
The problem is an inflated property market.

XjustagirlX · 03/02/2021 17:48

@woodhill but unfortunately £500k in the SE still means they are incredibly fortunate relative to the rest of the country.

MarshaBradyo · 03/02/2021 17:49

[quote XjustagirlX]@MarshaBradyo but why can’t they just pay when they do eventually sell? The gov won’t make people sell their homes[/quote]
I was just going by op

What is the proposal on timing? If people get hit with a £25k or above bill on this street a large majority won’t be able to meet it

If it’s when people sell. Then they’ll all stay Grin

woodhill · 03/02/2021 17:51

[quote XjustagirlX]@woodhill but unfortunately £500k in the SE still means they are incredibly fortunate relative to the rest of the country.[/quote]
No sorry I don't buy that. Property is so much cheaper in other locations and you can get much more for a lower price.

MarshaBradyo · 03/02/2021 17:51

[quote XjustagirlX]@woodhill but unfortunately £500k in the SE still means they are incredibly fortunate relative to the rest of the country.[/quote]
I don’t think that’s relevant

The most relevant part is what will the tax do?

If it’s immediate then it will devastate some and many leaving homes they’ve had for decades

If it’s at selling then see below

If it’s when you die well that’s not so bad

ThatIsNotMyUsername · 03/02/2021 18:01

My sister and I both bought properties at the same time. She bought a small holding with a large barn conversion - with some work needed (in Scotland) and I bought a 1 bed flat in the arse end of the city of London. Around the same time another sister bought a 4 bed house with a large garden and views of the mountains (in the US).

All the same price!

o8O8O8o · 03/02/2021 18:04

Nick Clegg now works for Facebook
tech giants are the new countries:(

XjustagirlX · 03/02/2021 18:07

The actual problem with taxation is people feel annoyed that they have to pay high taxes. Most people get out more than they put in.

People should feel happy to pay tax. If you are paying tax it is because you have gained /earned it. We should feel proud to pay into our government and help the less fortunate.

I don’t have any issue paying my taxes and feel incredible fortunate to be able to contribute more to subsidise people who have less.

I work in tax so see daily people wanting to reduce their tax bill to as low as possible. I know it’s legal but it is just the wrong attitude in my opinion.

If we all helped each other more and didn’t try to take take take we would live in a much nicer country.

Blackberrycream · 03/02/2021 18:09

@Kazzyhoward

Any wealth tax on property is always biased against the south east.

Is it? Presumably property prices in the SE are high because of higher than average earnings compared to cheaper parts of the country. So, the people in those areas are earning more to be able to afford to pay more.

From reading that you clearly aren’t very familiar with London.
o8O8O8o · 03/02/2021 18:09

In my street there are lots of elderly people who own small houses like mine, often very modest and unmodernised. They have no money. What would they be expected to do?
so what you are saying is these people own very valuable assets which have increased in value hugely since they bought them...but still want to claim they are poor
isnt that like me saying I have a drawer full of diamonds which are worth 10x what I paid for them, but no money in the bank, therefore I am poor?

MarshaBradyo · 03/02/2021 18:13

@o8O8O8o

In my street there are lots of elderly people who own small houses like mine, often very modest and unmodernised. They have no money. What would they be expected to do? so what you are saying is these people own very valuable assets which have increased in value hugely since they bought them...but still want to claim they are poor isnt that like me saying I have a drawer full of diamonds which are worth 10x what I paid for them, but no money in the bank, therefore I am poor?
Diamonds are easy to sell

Selling your home you’ve had for decades to pay a bill could be devastating. Would you be ok with it?

VinylDetective · 03/02/2021 18:15

@o8O8O8o

In my street there are lots of elderly people who own small houses like mine, often very modest and unmodernised. They have no money. What would they be expected to do? so what you are saying is these people own very valuable assets which have increased in value hugely since they bought them...but still want to claim they are poor isnt that like me saying I have a drawer full of diamonds which are worth 10x what I paid for them, but no money in the bank, therefore I am poor?
Unless you can live in a drawer of diamonds, no. As I pointed out earlier until bricks become legal tender that money doesn’t exist. People aren’t pleading poverty, they’re just unwilling to sell their homes. Is that so difficult to understand?
o8O8O8o · 03/02/2021 18:21

they’re just unwilling to sell their homes. Is that so difficult to understand?
of course I get that selling a home isnt the same as selling jewelry, still we have people in possession of considerable assets who are choosing to use them 'inefficiently'

Blackberrycream · 03/02/2021 18:23

Big brother.
Inefficiently, indeed. Wow.

YouJustDoYou · 03/02/2021 18:23

so what you are saying is these people own very valuable assets which have increased in value hugely since they bought them...but still want to claim they are poor
isnt that like me saying I have a drawer full of diamonds which are worth 10x what I paid for them, but no money in the bank, therefore I am poor

No, because you can't live in a drawer full of diamonds, whereas if your only asset is the very home you live in, but you have no cash...understand now?