Inheirtance tax of 10%

[PropertyD]

Whilst I think Burnham is not going to be the answer to anything really I have heard that he is thinking of scrapping inheirtance tax and just putting 10% on everyone’s estate. I don’t think this is bad idea at all.

The very rich don’t pay very much if anything and clearly 10% on a £100k estate is not a huge amount and it just seems fairer if this happens. No 7 year rule, no trusts, no complicated set ups.

Anyone think it’s really going to happen?

How much will it really raise?

More than you’d think. Suffice it to say that I’m pleased our seven years expired last summer.

Many people born in the early 1960s have final salary pensions which are paying out generous lump sums which are now being passed down to avoid IHT later if unspent. You don't have to downsize to do this.

A flat rate for all will penalise many Burnham supporters who have struggled to buy a modest home, it could, and should, be spun as the poorer are subsidising those with grander homes.

I’ve worked in tax for a long time for HNWs (and some UHNW/UUHNWs) and have never known anyone to go to vast lengths to get out of IHT. There are some people that are prepared to but it’s totally wrong of you to say most people do. There are a lot of rich people that pay A LOT of tax to HMRC.

How does that work? There would have to be a personal allowance just as there is with income tax.

I'm not sure why you keep using Cameron's government as an example of a tory government. They just carried on from where Blair left off but with a shit economy.

The state audits itself via the NAO and is often found to be doing a shite job. Maybe we should start asking why rather than just expect more tax.

I think most on MN have no clue how the ultra wealthy behave but just like to think they're all evil wankers. Despite them paying for the majority of public services.

indeed - top 1% contribute about 30% of tax revenue.

And didn't Milliband say he'd keep with Austerity in his GE electioneering!

This.

Plus Labour left them with a massive amount of PFI debt. My local hospital’s PFI development opened in 2010, but the operational and maintenance contract doesn’t finish until 2043. The actual cost of the development is £148 million, but it will have cost the taxpayer £766 million by 2043.

You’re confusing the wealthy with people who are high paid. They’re not the same. The wealthy don’t pay much or any income tax.

For example Rishi Sunak paid a total UK tax bill of £508,308 on an income of £2.2 million for the 2022/23 tax year. This resulted in an overall effective tax rate of 22.8%, as the majority of his earnings came from capital gains on a US-based investment fund, which is taxed at a lower rate than standard income.

The treasury has looked at increasing CGT on a few occasions but have advised against sharp increases due to projected falls in revenue. That said, the left are desperate to increase it to be ‘more fair’. Playground policy making, one might say.

One might but one would be wrong. Why should someone on minimum wage pay 20% income tax with another 8% NI when multi millionaires pay 22.8%? Gross injustice one might say.

IMO, 22.5% tax take of a significant income is better than nowt. We might all think they should dob in a bit more, but until politicians are ready to fight a big fight, it won't happen. We are modestly well to do, having started our own businesses in our 30s, bought a house and saved into a SIPP under well-publicised and understood rules.

In October 2024 RR stood at the podium and ripped our retirement savings plans apart. There are no DB pensions in our world. Nothing is index-linked. We were self-employed from the early 1990s. Everything in our pension is money we contributed and a grateful government added back the tax, happy that they were not on the hook to pay our pensions. So from next spring, it will be included in our estate, and taxed. I cannot begin to express the rage.

IMO, 22.5% tax take of a significant income is better than nowt.

The same rate as PAYE would be even better.

It won’t be taxed until you’re dead. I really don’t give a stuff about tax on our estate when I’m dead. At current rates our kids are on track to get £250k each tax free and 60% of anything over that. If that’s not enough for them we’ve definitely parented wrong.

Dear @BIossomtoes I went self employed in 1990. What is PAYE? I have not been employed since then.

Don't answer: I do know!

Precisely. We all know the old self employed dodge - very low salary and the rest as dividends.

It didn't quite work like that with me, because I was never a company, and my accountant was an Enid Blyton head girl. But her clients were never investigated. Sue was ultra-squeaky clean and legit.

@OneMintBear Interesting. I've generally assumed that very wealthy people put large sums into trusts for their children/grandchildren, for example, and those can be exempt from IHT under certain circumstances. Isn't that the case?

I'm not saying that these are vast lengths, but it's unlikely that less wealthy people would do this as they'd lose access to that money (and most people can't risk that in case of care home fees, etc.).

@BruFord while I would like to be UHNW, I'm quite a long way short. But everything we have, we earned, working for ourselves. There has not been an employer to chip in since 1990. No sick pay, six weeks maternity leave at £98 per week, no childcare subsidies. The system has left us to fund our own retirement plan, and we did, so do please allow me to be a bit salty about the Chancellor's decision to bring pension savings into estates.

@Papyrophile I wasn't commenting on your posts at all, I haven't fully read them! Sorry if it came across like that.

I was simply responding to @OneMintBear's statement that most wealthy people don't try to avoid IHT. I've assumed that the wealthy do use certain tools like trusts and wanted to know whether that's the case in @OneMintBear's experience? I don't think it's wrong to do that btw, people in that position will have paid huge amounts of tax over their lifetimes.

No problem @BruFord . I do get quite exercised when people who have clearly always spent their entire career in the public sector with the full index-linked pension plan start to opine about taxing pensions as part of the estate for anyone who had to save it from scratch.|

Why is it a gross injustice? If it raises more money for the treasury why isn’t it just common sense?