As the saying goes, there's only 2 things sure in life. Death and taxes. I think taxation can and should be fair across the board and set the same for everyone above a base level of earnings. Simplifying taxation would mean huge savings in admin and bring in more from those who currently manage to evade taxes cos of all the loopholes and fancy footwork the rich can afford to exploit.
Saving for your future and living within your means ? Many of us have done that only to be penalised at the latter stages. I think it is fair to say that the definition of "responsible living" has changed over time. That doesn't just apply to civilians but also to both central and local govts. I could well be wrong but wasn't there something about if you are stated in a will to receive some inheritance, if the "giver" dies within 7 years, the inheritance tax you would pay is reduced ? There is also the clause which allows you to give tax free donations to charities tho I don't know whether this is limited according to the amount ? People with mortgage free homes often need all the money from a sale to pay for their residential care and still can't always afford the fees charged. However we look at it, we all have to pay out for something if we continue to breathe. Some can afford a lot more than others.
This is where the problem arises because, at the moment, we have been discussing Inheritance Tax on lived in properties. That doesn't come into earnings and should not be taxed. Tax should come on earnings and not perceived value due to the vagaries of where in the country you happen to live. The IPPR have proposed that properties in the F G and H bands have their council tax raised by 50% - 100%. Our three bedroomed bungalow comes within those bands simply because they set the bands as a group value in an area. So we are in the same band as some of the houses around us that are now twice our size. All these things need taking into account and amending fairly but that would be considered much to costly to implement. Yes, if you last seven years there will be no inheritance tax on that gift with a sliding scale below that period.
I dont get this perception that people have more than they NEED. Discounting the super rich, if you confiscate money from people that they don't NEED you will just stifle ambition, who's going to work like crazy, get themselves nicely set up in retirement and then get whacked by taxes because they have more than they NEED. There are already means tested payments to those that have less than they NEED. I've never made big money, never been ambitious but always been careful, I probably have more than I NEED, I dont see why I should get ripped off by government for that reason. The wealth tax that keeps getting bandied about is mostly about people living in houses that are expensive, ok some actually bought them at a high price but a lot didn't and the value has just spiraled, but what government has ever done anything to bring down those highly inflated house prices, if fact they alway encourage higher house prices and a good market, possibly because of their rake off in percentages of stamp duty. House prices have nothing to do with supply and demand IMO.
Guess it depends on what you NEED. According to the little pop up weather thing on my laptop, I NEED to be told that Sunset is coming soon. Oddly enough, it never tells me that the Moon may appear later on tho. Some sort of bias going on I reckon
Fair point - although, last Saturday evening, I forgot that I had been chopping chillies and later gave my eye a good old rub... I remembered really quickly about those chillies! The problem with IHT is that it is a very blunt instrument - it may well be the case that the person inheriting the property still lives with the parent that has passed, so on top of losing their remaining parent they are then faced with losing their home, just because some faceless entity deems that it is bigger than they need. And that is the problem with policies like this - who determines what is too much? And what safeguards to prevent creep? What is to stop someone in the future from saying you don't need a 2-bed semi in suburbia, but instead should be happy with a chalet home or even a shed? After all, for someone that is homeless, a shed would seem luxurious.... Perhaps also the thing that needs to be looked at is how property is sold and financed. Even back when I was young enough to get a mortgage, I'd be earning circa £25k (not bad at the time to be fair), yet a house would be £350k - - so for a bank to lend on that at even 8x my salary, they'd still be wanting £150k deposit. Where the hell does a bus driver find £150k for a deposit?? Yet, the payments on a 30 or 35 year 100% mortgage on a property like that wouldn't be much more than paying the rent on a similar property - so it is unaffordable when it is a mortgage payment, but not when it is rent? THAT is where your disparity comes from. As it stands, we're currently looking to move back north, because that is the only way we can see of reducing our costs to the point where we can clear some debt and stand even the remotest chance of buying something and even then that is a slim hope, more likely hinged on inheritance. My last rent increase was £150 more per month - and I fully expect next year's to be the same or nearer £200 more per month. It will be a miracle if my salary goes up by that much and that doesn't take into account all the other rising costs. Thing is, my problems are not caused by folks who have worked hard and bought themselves nice houses - - my issues are with greedy energy companies, useless banking rules and procedures and what little housing supply there was/is being rapidly burned off by folks arriving in dinghies.
Your tricky situation, @Fat Controller, has been caused because all the rules are made by the wealthy for the wealthy. Owning a home has been pretty much the only route for most ordinary folk to accumulate assets since the 1950s ... and now that route has been largely closed down. It is no coincidence that, at the same time, the portion of all available assets owned by the top 1-5% has grown vastly. A resharing is required, and the scale at which this is needed is growing constantly. I see IHT as one way to help this, as it takes a proportion of assets and redistributes these within society. The fall in home ownership is a bomb waiting to go off. As current 40 yr olds reach retirement, they will have no way to pay ever increasing rents, and demographics will mean the gov has less income from earners to extend a safety net. It is shortsighted in the extreme not to plan for this by adjusting the way the housing market works. Allowing foreign equity companies to buy up swathes of new builds will come back to haunt the country in 20 yrs or so.
To qualify for an IHT free gift, you have to actually give it away before you die ( not promise it in a will) and then survive 7 years. However, if in that time you require state help with residential care for instance, you could be judged to have deliberately tried to evade being liable. It’s a bit of a minefield. You can for instance make regular gifts out of income, eg pay a child’s mortgage, as long as you have enough income left to live on. However if you pay the same amount out of savings instead of income, and don’t survive 7 years, what you gave away will be added to the total being assessed for IHT. I think it’s deliberately made difficult and confusing so people make inadvertent mistakes. (inadvertent mistakes - is that a double wassname?) I’m beginning to wonder if the Bank of Under the Mattress might be a feasible option after all.
So you were looking to buy a mansion when you were earning 25K? When I was earning 15k back in the 1990s you could easily buy a house for under £50k. I bought my first house with a £45K mortgage and 2K deposit. It's only after the millenium that house prices got so out of step with income. 3 or 4 times salary was the norm for a very long time, and most lenders would only lend 3.5 times a single salary, or 2.5 times the main salary and 1 times the smaller one (usually the wife) for a couple.
Some are in my road, but they have been extended, at expense of the garden and access, and extensively modernised.
You wouldn't need to bother doing all that. A pretty run-down ex-rental would go for around £400,000. A brand new shoe-box size 2 bed terraced with one parking space and a patio garden of about the same dimensions would be £350,000 ish. Crazy!
