Scared of what labour will do

[Wantachangefor2024]

Is anyone else terrified of what labour will enforce. The tax on farmers. Will they means test pip? Will they tax state pension more? What else will they do and where will it all end. They ruthlessly without no care took away the winter fuel allowance. Means testing and taxing state pension would massively impact my family

They were always there. We just had breakdowns later in life. Also the internet allowed ND to meet.
This is multifaceted.

@EasternStandard last year we were no 2, the previous year was lower but we also have a lot, "the U.K. had the world’s third-highest number of dollar millionaires." I didn't know that.

The main ones moving are non-doms & those from Russia.

There is an also a question re how much difference those leaving make "For example, last year’s non-dom tax take represented 0.8% of the U.K.’s total £1.1 trillion haul" again a figure that surprised me.

America has the most millionaires & billionaires, presumably that's why only they get away with taxes based on citizenship vs residence?

I can't be bothered to find the source but it might be Henley & Partners who advise on relocation tax and rules. China was #1 in millionaires leaving home domiciles but the UK was second, which is more than a bit scary when you consider the relative population sizes. There are roughly a billion Chinese people and even the highest estimates put the UK population at 73 million.Therefore, the UK is losing wealthy people faster than anywhere else in the world.

Absolutely fine to declare, shut the door on the way out. But the reality is that the UK has lost an asset who would have paid a significant amount of tax, to help fund education and the NHS, and won't get the money back again.

We're not ultra high worth people, but we are just successful enough to think we should preserve what we've earned and parental enough to want to pass it down to DC. That is, IMO, the thin line -- and the art of government and taxation is to take a sensible share but not more. Where that line is drawn looks very different depending on the commercial risk a person or couple took to make the money. In self employment as a freelance writer, I was able to cover our day to day costs and mortgage while DH built a business.

Old rules still work:
1 The first year you pay for the business
2 The second year the business pays its way
3 The third year, the business starts to pay you a wage. But probably not a pension contribution; that comes in year five or six. And after that, reinvestment and pension contributions are the priority. Until you retire.

The super rich have super accountants who work out all the ways to pay as little tax as possible.

the UK has lost an asset who would have paid a significant amount of tax,

Not if they’re paying less than 1% of the Treasury’s income. That’s not significant by any measure.

China was #1 in millionaires leaving home domiciles but the UK was second, which is more than a bit scary when you consider the relative population sizes. There are roughly a billion Chinese people and even the highest estimates put the UK population at 73 million.Therefore, the UK is losing wealthy people faster than anywhere else in the world.

In terms of % of millionaires per adult population China is 0.6% & UK is 5.8% so I'm not sure the above is true?

Not if they’re paying less than 1% of the Treasury’s income. That’s not significant by any measure.

I was pretty shocked non doms contribution was so low tbh.

0.6% of 1.5 billion is many times more than 5.8% of 67 million.

Wasn't Sunak paying less in tax than a nurse? Or am I misremembering?

My statistical skills are not wonderful enough to calculate precise figures. But the UK has started to lose net tax contributors faster than it is replacing them. Which I think is a problem for the future.

I don't disagree with @ploppydoppy that the really big numbers of people are the mainstream middle ranking either. But they are starting to feel very pressured, and not all of them are going to take the pain quietly.

What a strange way of looking at it. That's arguing semantics.

The state pension counts as earnings, therefore it's taxable. As you say, tax is paid if one exceeds the tax threshold in any tax year. Many pensioners do, but that's irrelvant to the absolute status of the pension as taxable income.

It's NOT exempt from tax, as for example gambling winnings are.

Erm, yes it is, as has been pointed out many times on this thread. If you deferred taking it (and a small percentage increase was added on) and/or were a member of the SERPS pension scheme, then your state pension will be over the personal allowance and HMRC will chase you for the appropriate income tax.

Well as the requirement for Farmers to pay inheritance tax only kicks in at £3m which is considerably more than Joe Public, and that even then they get more time to pay it than the rest of us. I think I can sleep easy on that score. Didn't see tractors in Whitehall when something affects the general public other than them. Biggest tax dodgers of them all.

I totally support the big idea behind changing IHT on farm land to defeat the ultra rich tax dodgers. I know a handful. But it is likely to wallop a lot of real farmers too. Good clever farmers in particular, and I am not sure we can afford to lose them in the mangle of tax law.

Money will need to be saved and taxes raised. Farmers will still pay less inheritance tax than everyone else. Pip needs to be abolished and replaced with a more sensible benefit. The benefit bill is astronomical. And still very possible to be getting sums in benefit far higher than the average wage.

At £10k per acre, you don't need to own a huge amount of land to fall foul of this rule. Most farmers locally don't have huge amounts of costly equipment because it's mostly livestock, and they buy contractors in to do the other work.

If they are clever they will be fine!

Key Strategies to Avoid Inheritance Tax on Farms

1. Maximise Agricultural Property Relief (APR)
2. Ensuring that your farmland, buildings, and assets qualify for Agricultural Property Relief is the most straightforward way to avoid inheritance tax on a farm. This means keeping the land in active agricultural use and making sure you meet the ownership or occupation requirements. For example, ensuring that a farmhouse remains “character-appropriate” to the farm is critical to maximising APR on the residence.
3. Utilise Business Relief (BR) for Non-Agricultural Assets
4. While Agricultural Property Relief covers the farm itself, other aspects of the estate, such as equipment, farm shops, or non-farming activities, may not qualify. Business Relief can fill this gap by offering up to 100% relief on non-agricultural business assets that are still crucial to the farm’s operations. To qualify, the business must be actively trading for at least two years.
5. Plan with Gifting and Trusts
6. Gifting the farm to your heirs is an effective way to reduce inheritance tax, provided you survive for seven years after the gift is made. However, gifting isn’t always straightforward, particularly when the farm is still in use by the owner. Establishing trusts can offer more flexibility. Trusts can shelter assets from inheritance tax while still allowing for some degree of control or income during the owner’s lifetime.
7. Ensure Active Farming Use
8. If the farm ceases to be used for agricultural purposes, it risks losing eligibility for Agricultural Property Relief. Keeping the land farmed is essential, even if it’s leased to tenants. The active use of the land not only keeps it eligible for APR but also protects its value from falling under inheritance tax scrutiny.
9. Seek Professional Advice for Complex Estates
10. Inheritance tax laws can be intricate, especially when it comes to farms. Complex ownership structures, diversified farming operations, or large estates often require tailored solutions to minimise tax liability. A professional adviser can help you navigate the various reliefs, ensure compliance, and develop a long-term plan that reduces the tax burden on your heirs.

https://fundermentalwills.co.uk/how-to-avoid-inheritance-tax-on-farms-in-the-uk-5-proven-strategies-for-agricultural-estate-planning/

@Azdcgbjml , I presume you are in the business professionally. Yours was a remarkably rapid and detailed response.

That was admiration BTW @Azdcgbjml.

No - I googled - link provided at the bottom of the post. I have seen lots of articles on the options available to farmers such as trusts.

The only people I know who get benefits more than someone who works are disabled parents of disabled children. And I am sure they would happily give up the money of it meant their disabilities vanished too.

A single disabled person with no kids is not getting more than someone who work.

Most of us have no option other than to “take the pain quietly”. A few pence on income tax or lowering the threshold for IHT would be fine by me if we saw the results in improved public services. It shouldn’t have shocked me how neglected defence has become but it’s been run down to the point where it scares me. I could spit nails when I think of all those wasted years of fucking austerity.

In the video I linked to upthread somewhere it suggests that land prices are so high precisely because rich people are buying it to avoid inheritance tax. Perhaps this will bring the prices back down again?

I think we might have discussed this before. But agricultural land is priced well beyond it's productive value. Mostly due to the tax breaks and subsidy system that has allowed this inherited wealth to remain in a small number of families for centuries in some cases.