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?

Perhaps you should ask someone earning just over £100k who is paying effectively 60% tax on some of their income if they think it’s fair that someone whose income is multiples of theirs pays proportionately less tax. Fairness isn’t about benefit to the treasury.

Your friends parent could easily have foreseen this issue by selling one property and putting the proceeds in the bank to pay IHT. I very much doubt that such a wealthy person has not done any estate planning - and don’t forget your friend will have been handed enough money to set them up for life without having to lift a finger for it. I imagine your friend is already pretty wealthy if their parent was so rich anyway.

Life isn’t fair. Policies that focus on fairness do not always make for good policies.

They’re better policies than those which set out to be blatantly unfair. You don’t believe in fairness, I do. Maybe we should leave it there.

I never said I didn’t believe in fairness. I happen to believe that good policy making should consider other things alongside fairness. The CGT raise is not based on common sense.

I never said I didn’t believe in fairness.

You didn’t have to, it’s obvious from your posts.

Which hasn't been the case for years. It was Gordon Brown who caused it in the first place. Successive governments have chipped away at the differences and now there's virtually no difference to the average self employed person whether they are a sole trader or limited company, even moreso with Reeve's 2% income tax hike on dividends (remember "no income tax increases on workers" - well that's a like because lots of limited company owners are workers, such as electricians, plumbers, etc, who may now end up paying more tax than if they were unincorporated sole traders).

There’s virtually no difference?

Dividend tax is currently running at 10.75% up to £50k and 35.75% up to £125k. I could have sworn PAYE is 20% up to £50k and 40% up to £125k. That looks like quite a big difference to me, especially in the lower bracket.

You’re so sure in your beliefs. Try widening your mind to other possibilities. You may surprise yourself.

Dividends are on AFTER TAX profits, so the company has already paid up to 26.5% on the dividends being paid, then another 10.75%/35.75% on the dividend. There IS virtually no difference anymore. In fact, some are now worse off being a limited company which is why I've been transferring some clients back to being sole traders and closing down their limited companies for the last year or two. We're also not setting up new clients as limited companies anymore unless there are other reasons i.e. where a limited company is required by the regulations of supervising bodies etc.