Gifts and inheritance taxes

[nearlylovemyusername]

Labour drafts options for wealth taxes to ‘unlock’ funds for public services | Labour | The Guardian

So IHT on farmland and AIM was rumoured. I don't have any knowledge on these subjects to comment, but here is very interesting twist:

"Sources said wider changes were also being considered on gifts and inheritance tax. Currently, no inheritance tax is due on gifts if they are made by a person who lives for more than seven years after the gifts are made"

In 2019 Corbyn wanted to introduce lifetime cap on receipt of gifts and inheritance on recipients, not estates - is this being considered again? Does this mean that those of us who want to downsize to help DCs with deposits will now pay to HMRC instead?

It looks like the rules of the game now are that you can earn and pay tax, but whatever savings/assets you're trying to accumulate will be taxed to the eyeballs and you can't even pass it on to your DCs without huge tax?

Don't work then.

@Defenestre well that's exactly the point, many will choose not to work, and that's why tax changes need to be managed so carefully, you can't just constantly keep increasing the tax on higher earners so there's no incentive anymore, you'll end up losing the skills and the tax. The same with billionaires. It sounds nice and easy, just taxing them more, but how much do you push it before they just move somewhere else and we lose their whole contribution in one fell swoop?

It would be fairer to increase everyone's tax slightly across the board than always focusing on higher earners.

This is Labour though, I'm surprised everyone on this thread is surprised that this could be a real risk!

yes; I think we have to assume that all of the crazy policies Labour previously supported will be options for this government when they have a super majority and kids are able to vote them in for perpetuity. Terrifying and really makes a mockery of doing the right thing

@Defenestre 22% ok UK working age population is economically inactive. This is the prime reason for tax rises.

Top 10% earners contribute 60% taxes; top 50% earners contribute 80%.
You alienate this group so they become economically significantly less active and the entire country is in trouble.

Be careful what you wish (vote) for

@Pogpog21 my thoughts exactly

Except that you can keep working, earning money and spending it, even spending it on your kids right up to the point of spoiling them with luxuries, without having to pay a penny more in tax - because Labour has committed to not raising income tax or VAT. The money you're then spending is going out and contributing to the productive economy.

The only people who stand to lose from increases in inheritance tax are those who would currently receive a massive load of money for doing precisely fuck all. So that is in no way a disincentive to work.

And if the only thing keeping you working is the thought of one day giving all the proceeds to someone for doing precisely fuck all, then those proceeds are of no benefit to the productive economy anyway. As in the case mentioned by a pp, of hedge funds buying up agricultural land and banking it, just for it's investment and tax management value.

So really, please don't worry about us. We'll do just fine if your little darlings have to work for a living like anyone else.

The problem with the IHT exemption as it works today is that a wealthy person who is an investor, not a farmer, can buy farmland and enjoy the exemption while someone else does the farming.

Maybe Labour can find a way to narrow the exemption so that family farms will not be taken away when the farm is passed down the generations, but people who do not farm and never have farmed cannot use this as a loophole to avoid IHT, which also has the effect of increasing farmland prices and pricing out actual farmers.