What financial steps are you taking to hedge the risk of a Burham Budget?

[Toohotforwork]

With all the financial uncertainty at the moment what are you doing to prepare/de risk Burham's actions?

We were in a chain to move house but have pulled since we don't really need to move. If the wealth tax came in the new house would be a silly choice and if stamp duty changes we might be better going somewhere else.

I think CGT will increase so we have trimmed our share portfolio a bit. We crystalized some gains and rebased them to current valuations.

We have taken cash that was sitting in the business out to protect from dividend increases. We'll decide where to invest it once we have a bit more clarity on what is going to happen. If interest rates increase will pay down the debt on our rental for example.

What have you been doing to hedge your finances?

Not sure what this post has to do with the previous chain.

But your point about disposable income & strivers doesn’t make any sense.

To be fair, you're looking at buying a £1.5m house so the impact on you would be higher than most people.

Part of the issue with this has been that No 11 leaks policy ideas in order to get a sense of what the response would be, which has simply meant that everyone has acted as if every idea was actually going to become policy. If we have less kite flying under Burnham that will be a very good thing.

£1600 a year with a single person discount

The model Andy Burnham has expressed support for is FairShare which is 0.48% of property value annually which would be £1920 annually for a £400,000 flat

Re council tax, I live alone in a two up two down in a less than pleasant area, my two up two down terrace is worth about £150K at current market prices for the area. it is a Band A and I pay £134 per month and that is with the 25% discount, and it is actually £2 a month a more than I would pay if i shared a Band D home which would of course be much bigger and in a better area. I know that council tax is about much more than rubbish collection but it is a basic yardstick I have two half sized bins, it takes me a month to fill the recycling bin and 6 weeks to fill the general one. Compare that with my neighbours, three adults so each paying approx £60 a month and having two full size general waste bins that go out for every collection and one large recycling which is also collected every time. A crude analogy i know but basically i am paying 3 times as much and using fewer services

Million/Billionaires are taxed the same as everyone else and already pay a lot of tax. You could double the tax they pay and it would be a drop in the ocean compared to the national debt, a penny on income tax would raise 6.9 billion according to AI. If you want to punish people for being 'rich' great, if you want to actually raise a lot of money it doesn't help a lot.

And if you live in London and own a property you may theoretically be a millionaire, but have no cash, the same in other expensive areas.

I am not overly concerned. if Burnham acts like Starmer, he will follow Starmer out of the door just as quickly and we will get a different government at the next election.

Due to the mansion tax, houses that were around the £2m mark are no longer shifting.

it’s not just the mansion tax, interest rates have impacted the housing market

Nail on the head. Everyone cries "tax the rich" but they don't crunch the numbers. There are very few millionaires/billionaires in proportion to the population, so "rinsing them" for tax won't bring in enough and may well end up bringing in less if enough of them move abroad.

I don't really understand how the government would benefit from getting rid of council tax ? they don't get any of the money raised by it , it all goes to the councils, so if they removed it they would have to give councils more money from central government ? Which would mean put other taxes up ?

The talk is that rather than council tax you would pay a percentage of the value of the house you live in each year as property tax. It isn't just get rid of council tax.

He’s going to bloody hate me , land , BTL , SUV , big pension 😪. I will do nothing , no selling of anything involving capital gains , keeping pension withdrawal to a minimum , anything to negate paying more tax to have it wasted .

It isn’t really. In 1945 the standard rate of tax across the board was 9 shillings in the pound - about a 45% rate as a starting point which increased for
higher earners.

But back then NIC was lower, and we didn't have the myriad of indirect taxes that we suffer today, no student loan repayments, no workplace pension deductions, no VAT, no insurance premium tax, no landfill tax, much lower (if any) road tax, fuel duties, no air passenger tax, no VAT on food nor power.

Yes, income tax has fallen over years, but indirect taxes have risen to compensate.

I know, my point is though that everyone paid more in tax not just ‘the rich’ - that’s how the welfare state was originally paid for. It wasn’t just taxes on higher earners or rich people (although they paid as well). It’s like people comparing benefits with the levels in Scandinavia and ignoring the fact that in all the Scandinavian countries, the basic tax rates are much higher.

we tax higher earners (paye) in line with other countries but middle & lower earners are taxed less.

There were also far fewer people paying the higher rate of tax in the past

I'll be doing nothing. I do own my house and also two BTL properties that DH and I bought over 20 years ago.

All mortgages are paid off and I have a good financial adviser on my pension and other portfolio. I'm as de-risked as it is possible for me to be at this point in time.

Also, I'll be very surprised if Burnham lasts any longer as PM than any of our most recent ones. There's only about 2.5 years until the next general election anyway.

After Labour got into power, we bought a house abroad to move to in a few years when we retire. We can't go before then due to having kids at school and the lack of education and work opportunity in the other country.
It's an escape route rather than hedging, as our assets are already optimised.

Have you seen any reports that the gain would be indexed? This would surely reduce the income from the policy change?

I don’t understand why it’s called a land value tax if it’s going to be a property tax. That would prevent them from taxing land which I thought was the whole point.

I wouldn’t worry too much it’ll take years if they are going to assess peoples gardens / land . I thought they meant the land the house sits on anyway .

We have a rental home (still mortgaged) but a tiny pension - so that will be our pension. To increase CGT would be so unfair. It's presumptous we are wealthy. We aren't.

The only way to raise any more meaningful amounts is to increase taxes on the middle class/workers.

The millionaires/billionaires are already paying over the odds and have options to mitigate, the average employee with a mortgage not so much.

@EvieBB You get tax relief on payment pensions and tax free lump sums. You don’t on a rental house. We got rid of ours because the yield wasn’t great. Sipp is a better vehicle for saving.