If you can manage financially - would you pay more tax, for better public services?

On one hand I feel that if I have it I should pay the requisite amount of tax, on the other most of what I have has come about from careful husbanding of taxed income other than the house. Like so many, I have gone from our first house in 1963 bought for just under £3K to my current house worth which would probably fetch well in excess of half a million, so if I died tomorrow inheritance tax would be payable. In all conscience I couldn’t look at tax avoidance but can’t start giving money away as I don’t know how long I will live and possibly need expensive care. Not sure there is a solution but I am in this fortunate position because we have been careful and provident and of course benefited from the ludicrous rise in house values. I wish one could dictate how one’s money was spent by the Treasury!

Whitewavemark2

Nice amount of unearned income though to the recipient.

Spoken like a true LP member. Will your estate attract IHT?

So, are we suggesting the recipient isn't deserving? Is the government more deserving? I don't think so.

“Inheritance tax is unfair, unjustified, and taxes have already been paid tens of ways on the inherited sum. Perhaps set the lower limit 5x higher.”

The value of homes has mostly been price inflation and not earned or tax paid on at all, a massive amount of the national wealth is tied up in residential property. This returns very little tax, then most is passed on to the family tax free, this perpetuates the divide between the rich and poor, the social divide gets bigger.

I am quite happy to pay IHT. I am fortunate to have an estate that will be large enough to quaalify it, many people are penniless when they die.

My concern is that it comes in at such a high rate. I think it should be graded, starting, say, at 10% and going up gradually. IF that were done I think it should start at a lower level.

What bothers me far more is how the money is spent. We currently have a government that is seeking elelction on a 'cut taxes' manifesto, when the roads I drive on every day are potholed, our schools are crumbling, the NHS is a disaster (although that is not only a money problem), and we have insufficient social housing - and that is just a start.

Katie590

“Inheritance tax is unfair, unjustified, and taxes have already been paid tens of ways on the inherited sum. Perhaps set the lower limit 5x higher.”

The value of homes has mostly been price inflation and not earned or tax paid on at all, a massive amount of the national wealth is tied up in residential property. This returns very little tax, then most is passed on to the family tax free, this perpetuates the divide between the rich and poor, the social divide gets bigger.

Think we must have gone wrong somewhere then as we paid nigh on £200,000 inheritance tax some years ago when I inherited a house!

Katie590

“Inheritance tax is unfair, unjustified, and taxes have already been paid tens of ways on the inherited sum. Perhaps set the lower limit 5x higher.”

The value of homes has mostly been price inflation and not earned or tax paid on at all, a massive amount of the national wealth is tied up in residential property. This returns very little tax, then most is passed on to the family tax free, this perpetuates the divide between the rich and poor, the social divide gets bigger.

Mortgages are paid for out of taxed income.

Maintenance of property paid for out of taxed income.

Insurance of property paid for out of taxed income.

Council Tax paid out of taxed income.

40% flat rate IHT is punitive and plain wrong.

It certainly is. What’s the betting that, having ruled out increases in income tax, NI, corporation tax and - under pressure - VAT, Labour go for increasing IHT, maybe abolishing the current reliefs? I don’t trust them an inch - and their core supporters would be happy to see people they perceive to be rich being squeezed further.

Germanshepherdsmum

It certainly is. What’s the betting that, having ruled out increases in income tax, NI, corporation tax and - under pressure - VAT, Labour go for increasing IHT, maybe abolishing the current reliefs? I don’t trust them an inch - and their core supporters would be happy to see people they perceive to be rich being squeezed further.

Politics of envy 🤢

I think the Conservatives have screwed up, but hell I am struggling to find anything inspiring or trustworthy in Labour.

My point is that paying a mortgage is little more expensive than renting initially, 10 yrs on your mortgage is less than rent AND the property has gained value - for free.

A renter will have rent increased year by year, they pay out of taxed income and council tax too, they can’t save because rents are so high. I remember 40 yrs ago you could rent and save for a mortgage, those days are gone, many deposits on houses are from parent.

I do understand that nobody wants to pay more tax but we havn’t “earned” the value of our homes, it’s mostly been inflation

Using your argument, people wouldn’t have ‘earned’ the private or occupational pensions which they paid into for years, nor the increased value of their ISAs or savings accounts.

In order to increase your property's value, you will have spent 10s of £1,000s on home improvements like extensions, loft conversions, garden makeovers, (employing many tradesmen too). So you have, in a way, "earned" the increase in value. It's not for free. A renter has none of that expenditure.

Germanshepherdsmum

Using your argument, people wouldn’t have ‘earned’ the private or occupational pensions which they paid into for years, nor the increased value of their ISAs or savings accounts.

You might as well go and bang your head against a wall…

One of the most expensive things that renters face is short term tenancies and having to move as much as every 6-12 months when their contract ends.

Whitewavemark2

Nice amount of unearned income though to the recipient.

Do you realise just how resentful that sounds?

Oh yes. Find myself constantly asked to support 'worthy causes' abroad - when they are no more worthy causes or deprived areas than there are just round the corner and down the road! We need to take a close look at our own areas and services.

we haven’t ‘earned’ the value on our homes

It a none argument.
I live in my home. Whatever it’s raised value since we moved in some 35 years ago, it makes no difference to me. If we sell it and move, we still have to pay today’s value on our new home. If I go into care, or my husband does, it’s likely to be needed to pay care home fees, so who benefits? Seems to me to be the state, who would have to pay for my care if I was a renter!

I was thinking about this in the car earlier, was it easier when it was just homes either owned by mortgage or social housing? It seems private rentals have caused quite a lot of problems for younger people

maddyone

^we haven’t ‘earned’ the value on our homes^

It a none argument.
I live in my home. Whatever it’s raised value since we moved in some 35 years ago, it makes no difference to me. If we sell it and move, we still have to pay today’s value on our new home. If I go into care, or my husband does, it’s likely to be needed to pay care home fees, so who benefits? Seems to me to be the state, who would have to pay for my care if I was a renter!

Exactly maddyone

IHT is just a punishment on those who have saved and made sure they can pay their way when it comes to care in later years, which as you say saves the state money.

Some attitudes towards IHT make me want to spend the lot, and let the state keep me in my dotage…

nope. next question. I used to work in the NHS and I think it wants a blooming good sort out before getting any more money....and in that sort out, I would like to see public misuse included.

the state chooses for you though, if you don't have a property or money you have less choice

Germanshepherdsmum

Using your argument, people wouldn’t have ‘earned’ the private or occupational pensions which they paid into for years, nor the increased value of their ISAs or savings accounts.

You do pay tax on your pension at whatever marginal rate and you also pay VAT on whatever you spend it on. Whereas house value just sits there and then is mostly given away, rental property owners pay tax on income, VAT on repairs and management, then CGT on sale plus inheritance tax on what’s left.

Your house value does go towards care home fees but only about 10% of home owners are unlucky enough to get caught by that.

The house attracts council tax and money has to be spent on it or it falls down. The point I was making was that pension pots, ISAs and savings accounts inflate beyond what you pay into them. Houses are not a breed apart when it comes to the positive effects of inflation. Do you own a house on which IHT is likely to be charged?

Katie590

Germanshepherdsmum

Using your argument, people wouldn’t have ‘earned’ the private or occupational pensions which they paid into for years, nor the increased value of their ISAs or savings accounts.

You do pay tax on your pension at whatever marginal rate and you also pay VAT on whatever you spend it on. Whereas house value just sits there and then is mostly given away, rental property owners pay tax on income, VAT on repairs and management, then CGT on sale plus inheritance tax on what’s left.

Your house value does go towards care home fees but only about 10% of home owners are unlucky enough to get caught by that.

In addition to you paying tax on your pension, the contributions are invested and finances others who pay tax on their income, including the finance company and agents along the way.
Your home just sits there, not contributing to the economy.

Inappropriate question Germanshepherdsmum. Other people’s financial affairs are none of your, or our, business.