How will you look to mitigate Labour’s tax hikes? (Part deux)

[EverythingAllatOnceAllTheTime]

How will you look to reduce the impact of Labour’s seemingly endless (imminent) tax hikes?

Sobering.

This isn't true I'm a public sector worker and I won't get a final salary pension scheme that benefit disappeared a long time ago

Conveniently avoiding the point.

Just so we are clear.

I think there's a good chance the IHT threshold will go down.

@Araminta1003 No, not all PS workers do receive a final salary pension with potential tax free lump sum. That went years ago.

Today it is more a career average pension.

I think the IHT threshold should go right down and the rate should be between 10-20 per cent, whatever triggers the least avoidance and yields the most cash. Given the over 65s are costing the NHS 500 odd pounds each a month they and we in time should all be happy to pay it.

OK @Enigma52 but it is still far better than private sector mostly so they should not be disincentived from saving an equivalent amount into their pension.

What makes you think that people in the public sector don’t “actually work”?

My high earning children are already planning on leaving for Jersey. They already pay the highest tax rates with no personal allowances. They use private health care and private schools thus reducing the burden on the state. But they have had enough. They can easily work remotely from Jersey. Their friend has already moved there. Their kids will board at school here

Great for them.

We are also looking at Jersey - although there appears to be a lack of schooling choice…

The jersey schools for younger dc are ok I'm told but mine are older and will board at school here

Last time I looked there was essentially a waiting list and (I think) you could only live there for a fixed period time. Has that changed?

@Takoneko - I assume you are being facetious, but to clarify, and giving you benefit of the doubt,
the reference was to active work in the private sector not passive income from assets. It’s shortsighted to disincentive persons from saving into their pensions. However much they may earn. If U.K. tax payer, they should be allowed to save into a pension, in a tax efficient manner, having contributed significant taxes.

I am following politics keenly at the moment. DH and I are clearly not as prosperous as @EverythingAllatOnceAllTheTime but we share some of the sentiments.

We are 68, and DH is an small-time entrepreneur in a small town. I no longer really work but was self-employed (and a high earner) for most of my working life. What we have, we earned ourselves, and we have paid a lot of tax on income, dividends and corporation tax, as well as collecting and paying VAT in both business and personal capacities.

We would also like to make sure the DC benefit too. We are NHS patients, but until recently the care we received was generally good, helped by counting many doctors as friends. Our private pensions were set up a very very long time ago, because we were self- employed and happily, our fund has done quite well for us and will continue to generate revenue even when we start to drawdown the income. And that's where our uncertainties begin. We've made decisions for 35 years on the basis of a stable pension-planning regime. Now all bets seem to be off!

It's starting to look as if the Chancellor is going to punish the people who have done the right and sensible thing. So we will actively take steps to gift money to DC for house purchase, and hope that one of us beats the seven-year rule so it's outside our estate for IHT. We don't have much in the way of assets, apart from our home and the DC is not going to be cocooned in luxury. They will have to work, but work is a creative self-realisation and fundamental to self-respect IMO.

My brother went to Zurich some years back, huge British expat community there apparently. I don’t think taxes are much better but services are and at least they are valued.

I wish the very best for the future.

Yes, and you can mitigate tax via Pillar 2/3 and property purchasing.

And that's where our uncertainties begin. We've made decisions for 35 years on the basis of a stable pension-planning regime. Now all bets seem to be off!

Well said @Papyrophile !!!

I wasn’t being facetious. Read by itself, your post just sounded like you were drawing a line between people who actually work and those in the private sector. Now you’ve explained, I can see you meant to draw the distinction between people who work and those who have passive income.

@Papyrophile - your DCs cannot take the NHS continuing for granted. Would you rather pay 10-20 per cent inheritance tax on your house in full and secure them and your grandchildren with a health service for all or would you rather they just get a full inheritance? There has got to be a compromise. We are living too long and we are costing too much post 50 and even more so post 65. The NHS is still cheap on a population level.
A 70 year old moving to Switzerland has to budget 800 pounds a month in healthcare costs alone.

Sorry, but the comparison with Switzerland is not correct (I lived there for five years).

Yes, you pay via mandatory insurance but the service offering is a world apart from the NHS, and the nexus with your GP is holistic, with prevention first being the priority. I know where I would rather live at 70.

@Araminta1003 DH has had cardiac issues for 18 years and is still running his business and paying his tax and meeting a payroll for seven decently paid employees, who do not need recourse to UC. DC will make their own way in life. I am sure there will be rocky periods. That's life.

Also the tax exemption on main residence and the hundreds of thousands of untaxed gains people have made there - it is not a right or an entitlement. It’s certain generations that have lucked out on that front and the exemption can be removed at any time. Lots of countries tax windfalls on main residences to control property market speculation. So we can’t assume our children are entitled to those gains either.

@EverythingAllatOnceAllTheTime - that is because you can presumably afford the £800 a month. Where did I say the service wasn’t better? I just said that is the approximate cost for elderly people moving there, not to mention the exchange rate issues and huge pension/savings you would need to live there. But yes, lots of cantons don’t have inheritance tax to direct descendants.

Of course not, one would have to be stupid to assume any such scenario. But in the absence of any social care insurance, along the lines of those set up in Germany and Japan, then people who have lucked out by buying property well in their late 30s are going to save the public a mint by having the money to self fund their dotage.

It's relevant here, but my father is 91 and apparently well and my mum died three weeks ago, in her own bed, in her sleep. Having not seen her GP in eight months, and not spent a night in hospital for more than 40 years.