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

That's NOT the case with doctors and dentists, where declining extra shifts to avoid the 62% marginal tax rate

I don’t think that’s anything to do with tax, it seems to be about work/life balance. We need to train more GPs. And we definitely need to tie newly trained doctors into a minimum period of working in the NHS before we allow them to emigrate and write off their student debt. But that’s another thread.

Yet it's ok to claim that the rich only engage in philanthropy for the purpose of lowering tax
Regardless of their conscious stated intention we just need to ask 'cui bono'..... And it's pretty obvious this has huge benefits and the wealthy are acting largely out of self-interest
low income people need to act out of self-interest because they have little income, the wealthy are trying to feather already luxuriously appointed nests to the detriment of the rest of us

@o8O8O8o

Yet it's ok to claim that the rich only engage in philanthropy for the purpose of lowering tax Regardless of their conscious stated intention we just need to ask 'cui bono'..... And it's pretty obvious this has huge benefits and the wealthy are acting largely out of self-interest low income people need to act out of self-interest because they have little income, the wealthy are trying to feather already luxuriously appointed nests to the detriment of the rest of us

I’m afraid I’m just not getting this.

How is anyone feathering their nest by giving money away? Yes, they may get a warm feeling because their money’s benefitting people less well off but that’s hardly the same thing. How is that to anyone’s detriment?

This is like that old philosophical question about whether Mother Theresa was selfless or selfish. At the end of the day it doesn’t matter, the result is the same either way.

@dontdisturbmenow

But philanthropy is tax deductible, that's just a fact, basically it's not their money they're giving away, it's HMRC's. How does that compare with poor people volunteering?

Deductible from gross income so that still marks a sizeable donation.
Those are massive generalisations about people. I don’t think people like Dolly Parton are feathering their nest with her book drive. That is her way to improve lives for people in similar circumstances to the ones she grew up in. Then again, I don’t really know but neither do you.

[quote Kendodd]**@dontdisturbmenow

But philanthropy is tax deductible, that's just a fact, basically it's not their money they're giving away, it's HMRC's. How does that compare with poor people volunteering?[/quote]
They get tax relief on the charity donations, not a full deduction. At 19% corporation tax, they still pay a net 81% of the donation made. Tax relief doesn't mean you reduce your tax bill by the full amount.

Tax treatment of donations is different in US, and AFAIK considerably more generous.

@DynamoKev

It's well accepted that the likes of doctors and dentists refused extra shifts if the pay would put them in the £100-£125k earnings bracket where the marginal tax rate is 62%. Isn't the issue for then the wanky way their pension scheme is set up meaning they wind up actually paying the NHS for shifts? I don't know many people earning £125k who object to 62% (and yes I know quite a few who earn at this level)

The issue isn't their particular scheme; it affects all pensions where there is a substantial fund built up.

I wouldn't object to 5% of assets over 500k.

mumisnotmy - and is that because you havent got 500k or because you have so much that 25k isnt a big issue? Sorry hope you dont mind me asking since we dont know each other.

we have over 500k but have just retired so dont have any income as such.

@dreamingofsun

mumisnotmy - and is that because you havent got 500k or because you have so much that 25k isnt a big issue? Sorry hope you dont mind me asking since we dont know each other.

we have over 500k but have just retired so dont have any income as such.

It wouldn’t be £25k. It would be on anything over £500k for an individual and £1 million for a couple. So a couple would have assets of £1.5 million to generate a £25k bill.

It wouldn’t be £25k. It would be on anything over £500k for an individual and £1 million for a couple. So a couple would have assets of £1.5 million to generate a £25k bill.

You can't possibly say that. No one knows how it would work, if it was brought in. HMRC/Treasury have a history of thresholds where the entire amount is chargeable, not just the excess, such as stamp duty. There shouldn't be any, but there are.

Another is VAT, where once a small business exceeds sales of the VAT threshold, VAT is payable on ALL sales, not just the excess over the threshold.

You can't possibly say that

I think you’ll find I can. I just did! Inheritance tax and stamp duty work exactly as I described.

1.5 million sounds an awful lot of money, but if you have a house in the south and a pension its actually not so much. And if like us you have retired, you have no chance of earning any more to pay the 25k.

By claiming tax relief on charitable donations, the rich effectively get to choose which causes public money goes to. Not very democratic.

@dreamingofsun

1.5 million sounds an awful lot of money, but if you have a house in the south and a pension its actually not so much. And if like us you have retired, you have no chance of earning any more to pay the 25k.

Oh give over. £1.5 million isn’t so much? You’re in the top 10% of the UK population with assets over £670k!

Some things that could be changed easily are things like the winter fuel payment. We've always been astonished that we just get given it because my husband is over 60, but we don't need it. Those kind of payments, like the £250 we got when our 13 year old was born, were supposed to be to help people who would otherwise struggle. We also got money for fresh fruit/vegetables when the babies were born. So things like that could be given only to those who actually need it. Bar the state pension though, which we've been paying into, of course.

You haven't been paying into the state pension interestingly. It's pay as you go - current tax payers pay current state pensions. There's no pot or fund you're paying into

vinyl - you live in a bulk standard 4 bed house on an estate here for 670k. where my son lives you would just about get a 2 bed terrace....not a posh area. then add a pension pot enough to cover you for 20 years.....

@dreamingofsun

vinyl - you live in a bulk standard 4 bed house on an estate here for 670k. where my son lives you would just about get a 2 bed terrace....not a posh area. then add a pension pot enough to cover you for 20 years.....

Assets of £1.5 million put you in about the 4% wealthiest in the country. You can say “It’s not so much” until you’re blue in the face, it doesn’t wash. It’s more than 96% of the population owns.

@PinkFondantFancy

You haven't been paying into the state pension interestingly. It's pay as you go - current tax payers pay current state pensions. There's no pot or fund you're paying into

Current tax payers also include pensioners, I will get my state pension in March after a few months short of 51 years paying in I think I have more then paid enough into the system get a state pension, and my tax will pay not only other peoples pensions but other peoples benefits (and I don't actually care about that ) funnily enough I was going to defer mine and it was my 38 year old DS and 14 year old GD who told me not to be stupid as I had paid in for it

What would be the proposal for a lot of Public Sector Pensioners. They don't have a pension pot, but do have a decent pension. The notional value of the "pot" would be substantial, but not easily realiseable without massive cost to the pensioner.
Those whose income is solely the State Pension don't pay tax; they still benefit from the Personal Allowance.

@Travellor

What would be the proposal for a lot of Public Sector Pensioners. They don't have a pension pot, but do have a decent pension. The notional value of the "pot" would be substantial, but not easily realiseable without massive cost to the pensioner. Those whose income is solely the State Pension don't pay tax; they still benefit from the Personal Allowance.

There is already a mechanism for valuing it - that came in with the lifetime limit and resultant tax charge which caused a lot of problems for the likes of NHS doctors and dentists. I would imagine the same valuation system would apply for any wealth tax.

There isn't a "Proposal"

The Daily Express floated an idea to help build up public opposition to tax on the richest.