To ask what you'll be doing to avoid the Labour tax hikes

[OptimismvsRealism]

Pension contributions
Gift aid
Selling my shares now while CGT is relatively low

What really worries me is that all the professionals we actually need to want to be here will just fuck off elsewhere, though.

It's not like we're knee deep in hospital doctors.

We know there are other parts of the UK that exist.

Most people are, I think, just pointing out that a “flat rate” declaration of what makes someone rich / what is affordable doesn’t work everywhere in the UK.

Someone earning in the top 10% would be on £67k. That may go a long way in Scotland - I don’t live there, so don’t know - but doesn’t if you live in London or the SE unless you were in a position to get on the housing ladder quite a few years ago. And not everyone has moved to London or expensive parts of the SE for the high salaries - some of us come from here and, like many other people across the country, just want to be able to stay where they come from.

I think there needs to be a more nuanced solution somehow - but don’t know what it would be..

I am probably going to France, but maybe Italy :)

How does it work at the minute where there is charge over the home? I assumed the state paid the care home and then claimed it back when the home was sold? Surely the private care homes aren’t waiting years and years for fees to be paid

There’s a huge exodus anyway. Some Fy2 year groups this year have 70% + moving abroad.

Doctors aren’t staying anyway.

Are you moving to France becuase the tax is lower than the uk?

I’m not surprised in the slightest, given the way they’ve been treated over the last 14 years! If I were them, I wouldn’t stay.

@Morph22010 I agree it needs more regulation as it’s a great way to effectively hide money from the tax man, but there seems little acknowledgement that targeting the tricky ‘farmers’ could hurt the real ones.

Arable farms particularly use lots of land, working farms worth £2m are not uncommon. But that doesn’t mean there’s a spare £600,000 sitting around to pay in inheritance tax!

There’s currently a trend - championed by the government - to use agricultural land for solar. That pays about £1000 per acre to the landowner for doing nothing. More than they’re likely to get from farming it and requiring none of the hard work or outlay in manpower or staffing involved in cereal crops. Imposing IHT on working farms may push farmers into using whatever land is left after paying the IHT for solar, thus reducing the amount of land being farmed for food.

The cynic in me wonders if, once the solar farm reaches the end of its life, that land is still considered agricultural and so harder to develop, or whether it’s then industrial and ideal for whatever building project is considered.

Ah well, in that case it’ll definitely happen ;)

At one level CGT on main residences makes sense. But, you’d have to bring back in indexing. And accept that the impact on people’s mobility jobs wise would stifle growth in the economy. As well as accepting that the housing problem will actually get a lot worse, as no one will downsize unless there desperate. And as no one will move unless absolute essential, the £15 billion that HMRC currently gets from stamp duty will all but disappear too.

Well, mainly for the lifestyle and the weather, and because my late husband and I bought a place there years ago. But for the level of unearned income I will have, yes, the French income rate is lower. Once you go much over €82k then tax is higher in France. And, interestingly, for the bulk of working people (who pay social charges too) in ‘the middle’ between €29k and €60k ish you also pay more in France. But, you do get deductions for numbers in the household as they tax on a household basis.

Me too!

Well that's it then, yet another thing he categorically ruled out that could well happen.

Ok I was just wondering, I have a friend who moved there for the weather and lifestyle and she’s always moaning about the French tax and social charge so I was thinking that was odd if it was significantly lower. Apparently from what she’s told me the social charge is also on lots of other types of income rather than just employment income like ni is here.

The thing is that with greater inequality, comes higher crime and lower mental health. Wealthy or not, it’s bad for us. So, it’s better for us all if either the gap between the wealthiest and poorest lessens, or the wealthiest fuck off.

When I first got involved in renewable energy, in 2011/12, the land rent being paid was nearer £2k an acre index linked for 20/25 years, when decent quality irrigated agricultural land was going for less than £500. So you can’t blame a farmer for going for it!

But, to your last point for the ones that I was involved in - 250MW in total - in the south, the planning contions attached to the permission were clear that the land had to revert to agricultural use if the solar farm was removed. Some sites were time limited in the permission anyway. But, what’s more likely is that the panels / inverters get replaced with more efficient ones that generate more power out of the same foot print. They tend not to be in places of huge value from a commercial property perspective, and residential would require a lot of infrastructure. But, never say never…!

The government really ought to consider leaving APR, so farms can survive trans generationally (otherwise there little incentive to really farm sustainably - it’ll become about short term profit all the time) but taxing the uplift in property values that flows from planning permission being granted. So agricultural land without planning at, say £25k a hectare without planning but £1m with is taxed on the £975 gain that exists only because the state granted planning

No-one wants to pay more tax but it is what it is. If it has to be done to contribute towards services then so be it.

The social charge is 9%, so not that dissimilar to our NI, though there’s no upper limit unlike here. But, as in the UK, it’s not on retirement income. And in fact if you can be bothered to navigate the French annuity market, French retirement annuities for the over 50s are 50% tax free, and 60% tax free over 60.

I think (please don’t quote me) that the local authority pays the enhanced rate for a self-funder and later sells the property to recoup costs and passing on the residual to any descendants.

But that only works if there’s equity in the house.

However if the tax charge is deferred for say 30+ years which could happen if a low earner only needs care in their late 80s or 90s, then the compound interest plus continuing annual uprated tax based on property value means there could well be little to no equity left.

Plus older people often take out equity release as well, so paying that plus interest as well as deferred property tax could mean that the notion of self-funding from the sale of your home disappears. Care homes charge private residents more than ones fully-funded by the LA, which effectively lose them money.

If there’s no cash left in the pot then the LA can move the resident to a cheaper care home or ask the family to top up. At some point with deferred tax due it’s likely many care home residents will be caught in this.

At the moment I think remaining spouses can stay in the family home until they die if one goes into care, the debt to the LA just mounts up. If the same thing happens with deferred property tax then I can’t see the LA agreeing to wait 40 years on the off chance the government haven’t laid claim to everything already!

Happy to be corrected if I’ve misunderstood how LAs currently manage this!

Yes but this is one of the most famously blatant loopholes in tax, so they have to address it somehow.

with every tax proposal someone in the treasury will be tasked with trying to assess the behavioural impacts that would follow that proposal. With the VAT on private schools the amount of money raised from the policy is based on the number of children transferred to state school as a result. This is a very emotional factor, hard to judge and so the potential money raised from the policy is very hard to estimate.

But if you were sort of thinking of possibly up sizing / downsizing but had no imperative reason to move and you were told tomorrow that CGT would be added to house sales, you would absolutely just sit tight, not move, might improve your current house instead (the trades would love it) but I one would move unless they really, really had to.

If income tax relief on pensions saving was reduced, would you still save? Probably. So this one will come in.

Makes you wonder to what extent Liz Truss knew she was going to crash the markets. Did she do it on purpose to make some friends serious money on trades predicting it? Or did no one give her any advice at all?

@Tryingtokeepgoing Interesting, thanks!

I don’t blame farmers for taking advantage of a lucrative sideline, I just despair that the system is set up to disincentivise actual farming. Good to hear that it should revert to farmland after, but, as you say, more likely to be repopulated with more panels.

For all the talk about carbon footprint and the benefit of renewables, using agricultural land for this means importing the equivalent in lost crops and that’s got an environmental price of its own!

Every building in the land has a roof. Mandating solar panels on each of these that is suitable would be a better way, I think. But complicated and much, much more expensive.

I’m not even sure it’s a requirement in current developments beyond a token panel or two, rather than for genuine sustainability.

If income tax relief on pensions saving was reduced, would you still save? Probably. So this one will come in.

Depends on what it’s applied to, doesn’t it? I pay into both a workplace and personal pension. It wouldn’t worry me if I got less tax relief on my personal pension, and I could manage to pay a bit of “extra” tax on my workplace contributions (as currently that’s out of gross pay). However, if they tried to get me to pay tax on employer contributions I’d have to think very seriously about it. And if they reduce tax relief on workplace pension contributions but don’t charge tax on employer contributions, a lot of people would just do salary sacrifice.

@Sunsgoingtokeepshining
"Makes you wonder to what extent Liz Truss knew she was going to crash the markets. Did she do it on purpose to make some friends serious money on trades predicting it? Or did no one give her any advice at all?"

I honestly dont't think that she has the temperament to either ask for advice or to accept it if given.

So you don't mind being poor as long as no one else is. Your wish might just come true.

I read somewhere that apparently we’re in a fortnight of bad budget news. The leaks are coming through without fail.

Latest is the possibility of means testing the state pension and/or upping pensionable age.

Apparently the Australian model is getting scrutiny where entitlement to the state pension depends not only on other retirement income but also the value of assets held!!!

So for those sneering at pensioners who are asset rich but cash poor, demanding they downsize and liquidate assets, looks like all your Christmases may come at once!

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I’m very familiar with the Australian system because my husband is Australian and my elderly in laws are still out there.

My experience of it would be that it works very well but Australian pensioners benefit from all kinds of things that we don’t offer pensioners here such as stamp duty relief.

Super annuation is also the norm in Australia so most Australian pensioners, as I understand it, also have private pensions, which is not the case here.

I don’t see it working well here based on that factor alone.