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

Lakegeneva, totally agree.

@AwaAnBileYerHeid Well arguably that's not really true, money makes money especially capital. The top 10% have increased their wealth disproportionately to everyone else in the last decade. Real wages for most have stagnated and with inflation in real terms have fallen for many. This has been going on for years but some analysis suggests that the pandemic had been very much a wealth increase for the wealthy.
If you personally have worked your arse off great, but many people from wealthy backgrounds (Family money) inherit assets, get given money, help with all sorts of things and work no harder than anyone else. Individual stories are one thing....But on a national level there isn't much of a correlation between how hard you work and how much you earn or have in assets unfortunately. However, there is a massive correlation between parental income/assets and the next generations financial position. If we want investment (in education, infrastructure and public health) to break this cycle (and the needless loss of human capital) then we need to raise money somehow...my vote goes to rasing it from unearned capital, so not taxing wages more but taxing gains in assets that are unearned...

Hang on, hang on.

The RUMOURS were for either over £500k, £1m or £2m. They were payable over 5 years. And didn't include mortgages. So unless you own £500K of property outright, it doesn't count. And it's not demanded straight away.

Also, it's a rumour.

The government could easily pass this if they wanted to. Labour would probably criticise how it was implemented, but how could they oppose a wealth tax? Same for Lib Dem’s. Both were in favour of increased taxes at least election.

Affor, yes as said before, it was a proposal, debunked by WTC.

Also i think there should be an online tax
Why do companies who have the huge costs of running store, keeping our high streets alive- employing way more people have to pay huge business rates based on the rentable value of their shop.
And as if to add insult to injury, if you’re a small business you get a discount, but it’s on the size of the building not the actual business.
So Starbucks and costa and pret pay the reduced rate.
Madness

Where i work we pay 50% of what we pay in rent in rates. How is there not a tax for online only.

It would seem an odd move to make after the stamp duty holiday. I have no idea why they changed the rules on stamp duty in the first place, seems a strange to take less tax whilst needing the tax receipts more than ever.

Almost no income now, all gone due to covid. Have savings and a pension fund because I worked my nuts off earlier in life, to ensure I would be ok later. Too early to take the pension. House owned, from work. Need house to live in. Need savings to pay bills for however long a life I get. No jobs that I can do now.

Clearly need to get busy pissing money away if this is coming. Should have had kids and got into debt, shouldn't I? And not even allowed assisted dying if my money runs out.

@Marinaloves Ehh? I didn't say anyone would be made homeless. I was suggesting if u couldn't afford a lump sum someone would create a pay scheme/loan to spread the cost and use your asset as collateral

@hettie
Sorry wrong person! Didn’t mean to tag you

Unfair. It would be fair if the amount were double that, I think. Many people with low incomes live in home worth not far off 500, and with minimal savings they would be taxed. On the other hand the Johnsons and Camerons of this world would still have their offshore millions (remember Panama) and large companies would still pay practically no tax. Why do the Tories always look to ordinary people to take all the pain, when it's so unnecessary? Naked self interest.

The Social Dilema suggested some kind of data tax to raise funds. It was an interesting idea.

Tbf @Hopdathelf it is wealth. Look at those in the south east discussing moving to more desirable places in the south west, north and midlands.
They can afford houses way out of the reach of us living there. Equally there is wealth of opportunity in the south. My son is struggling to find a decent apprenticeship up here in the nw, if he lived in London I’m pretty sure that wouldn’t be the case. Can’t have it both ways.....

Considering most people on here have annual incomes in 6 figures and £500k - £1M houses, i think MN could settle the government deficit in no time

Is the proposal 5% on the excess over £500k or nothing if your assets are £499k and £25k to pay if your assets are £501k?

Including pensions is a bit tricky - at least with property there is the opportunity for people to release equity if they can't otherwise access the lump sum. If it's in a pension and you are under 55 then you can't access it at all.

@murbblurb
But you’re being too emotive over it. No one would think this was fair if you bought your house for 200k and because property wasn’t a business as it is in the uk, it was still worth 200k so all the money in the house had been taxed already. But this isn’t really the case is it.
You’re lucky your house has given you massive tax free profit.

I also think the problem would be with debts? My mum has an equity loan - so will people just take massive equity loans to avoid it

Wow I just the KPMG report on the WTC commission findings and it supported the introduction of a one-off wealth tax. The report was Dec 2020 has there been a follow up to this?

*read

@Marinaloves

In America they pay property tax on the value of their home. Paid yearly. I guess they might go down these lines. I do not personally think this is a bad idea. Regardless of it’s supposed fairness. Because in all honesty it affects such a tiny proportion of the population, and they invariably can afford it. People of course will say, oh my house is 800k but it’s a 2 bed terrace etc etc and a 2 bed terrace is only worth 80 in (insert some northern town) it’s not fair... well the only reason I know people who own 800k houses in London is having made HUGE amounts over the years on their property purchases, or having been given HUGE amounts of help from parents. Neither of these reasons should make you exempt

This would be a great idea, and think about it, if it is done in the more capitalistic America, then it can be done here.

Must people in the UK plough their money into property, creating a huge bubble, this needs to stay to be fair to all generations.

My parents own their house mortgage free, which is worth over 500k. My dad was also forced to take early retirement because he has incurable lymphoma, is too young to draw on his private pension and so has been supporting him and my stepmum for the last 2 years on their savings as they have exactly zero income. He doesn't have 30k to spare and won't ever have 30k to spare.

Bootsie, apparently so.

@Pukkatea
Well he does. He’s got a house with a probably large tax free amount of profit in it.
Only most people don’t ever want to access the profit until they’re old. Or they want to pass it on - they don’t want to use it to pay to help society - does that sound fair

Pukkatea, your exact scenario is why implementing such a tax would be unlikely.Many of these proposals are drip fed to the media for public opinion, this one goes down like a lead fart!

@Marinaloves the house was only bought recently for not much less than it is now worth, after the deaths of both my sets of grandparents within a year. Previously to this they were living in a house of half the value.