Sir K claims "a budget for Working People", ha!!!

Casdon what I am saying is that loopholes need to be closed and they have not.

Mollygo

ronib

Allira well that hardly helps the situation though does it?
Very wealthy families will still pass on generational wealth with expert planning. Nothing has changed.

Of course. But there’ll be lots of pretence that it has, except from those who aren’t in the very wealthy category.

So what you’re saying is that the additional income the government has estimated from the changes in IHT won’t materialise? At least that is something that can be monitored.

ronib

If I haven’t missed it, inheritance tax can be evaded altogether by passing on wealth seven years before dying.
I do understand that death is not entirely predictable within seven years but it’s a nonsense to pretend that this loophole doesn’t exist. Farmers will doubtless use it.

I'm pretty sure that passing on land will attract CGT and that of course will only be on the increase in value, there are also costs involved with land transfers but it would still be less than paying IHT.

So long as the seven year rule exists, inheritance tax can always be mitigated. This doubtless benefits the wealthy in this government too as in turkeys don’t vote for Christmas.

ronib

Allira well that hardly helps the situation though does it?
Very wealthy families will still pass on generational wealth with expert planning. Nothing has changed.

Of course. But there’ll be lots of pretence that it has, except from those who aren’t in the very wealthy category.

Death is a nuisance! I paid a hefty amount of IHT (called Capital Transfer Tax then) on my mother's estate. She died 3 years into the 7 . She could have sorted it sooner to avoid any tax but didn't approve of the boyfriend I was with at the time, so waited too late and gave it to the government instead!

ronib

If I haven’t missed it, inheritance tax can be evaded altogether by passing on wealth seven years before dying.
I do understand that death is not entirely predictable within seven years but it’s a nonsense to pretend that this loophole doesn’t exist. Farmers will doubtless use it.

No it can be “avoided” by gifting and living 7 yrs as long as the donor does not benefit after the sale, there are a lot of other rules that need to be followed. Just like gifting your house business are the same.

The rules affecting all business property have changed not just farms so solicitors are going to be busy, I havn’t seen the small print yet so there may be some more restrictions

Allira well that hardly helps the situation though does it?

My point.

ronib not that straightforward. This from jurit.com…

“One of the biggest problems with gifting your home is something called the Gift with Reservation of Benefit rules, which have been around since 1986.

These rules say that if you give something away but continue to use it for free, then the gift is simply ignored for inheritance tax (even if it is legally valid).

In other words, if you give someone your home without moving out, or without paying rent, then the value of the home is still in your estate for inheritance tax when you die.

This means that for a gift of your home to be effective to save inheritance tax, you need to move out of the property or, if you stay there, you must pay a full market rent.

The person who receives the rent is then subject to income tax on that additional income. It can’t be a token rent (often called a peppercorn rent). Usually, an estate agent can tell you what the rent should be, and it will need to be reviewed annually to check it is still the right amount.”

There’s also something called ‘deprivation of assets’.

Allira well that hardly helps the situation though does it?
Very wealthy families will still pass on generational wealth with expert planning. Nothing has changed.

Well, we never know what fate will bring!

If I haven’t missed it, inheritance tax can be evaded altogether by passing on wealth seven years before dying.
I do understand that death is not entirely predictable within seven years but it’s a nonsense to pretend that this loophole doesn’t exist. Farmers will doubtless use it.

I agree with several posters above, the issue of 2nd home ownership, particularly those left standing empty for much of the time, needs to be addressed.

IMO, in a socially just country, people should not be able to own homes that are standing empty whilst others cannot afford a roof over their heads.

I hope RR will go further on this in a future budget. But, for now, one step at a time … even socialism takes its time

I thought the budget was well thought out and they kept their pre election promises. Lots to like and I'm really pleased there's not a lot of austerity measures, we need to improve our infrastructure but I'm worried about where we're going to find the workers to build the houses, hospitals, schools and roads. I struggle to find a decent plumber!
I'm pleased to see some loop holes being plugged. Land has been going for silly prices where I live, not to build on but as tax haven for very wealthy people to pass on IHT free when they die but it'll hit farmers like Jeremy Clarkson! I've never really understood why pension pots could be inherited without attracting IHT, tax free savings passed on tax free! Glad to see that particular option being closed down.
The increase in NI for larger businesses will push up prices and is potentially inflationary but at least we will have some choice over what we spend our money on. There was so much fear mongering prior to the budget which came to absolutely nothing.

Rosie51

I know someone who has a second holiday home (brick built house in a village), a static caravan in another area, and a beach hut (not a good description, this one has a full cooker and heating system but no mains sewerage) in a third. None are available for holiday lets so I really do think they impact on the local areas. Unoccupied they contribute zero money to the local economy, although I accept they do not impact school or medical services. I suppose I just think nobody should have a second home until everybody has a first one.

Well, it rather depends on where the second house is. There are many places, take Blackpool, where there are streets if derelict empty houses. DD saw them there about a year ago.

Blackpool is one of the poorest areas in the country, high unemployment, high levels of deprivation. Few locals have the income to buy these houses and renovate them. I think an influx of second home owners who bought the houses because they were cheap and employed local businesses and local epople to renovate them would be welcome like manna from heaven. And as you say Rosie, they may spend money when they are there, but often leave them empty - and when they are not there they place no demands on roads, schools, the NHS, police or any othe local service.

I can see the problems in popular areas where houses are priced out of pockets of local people and where the proportion of second homes in previous thriving communities damages those communities.

But the question of empty houses is complex. many of them are in places like Blackpool where supply of houses exceeds demand. London boroughs have tried offering these houses in the north to homeless people in their boroughs, but if someone has a job, albeit poorly paid, children in school, and family networks, why would they want to go somewhere where they would be unable to get a job, have to disturb their children's education and where they would not have important supportive community and family networks - and, of course, unable to afford the cost of travelling to see them.

Exactly, M0nica.

For some reason I can’t use the quote function in this thread, but they are my thoughts too.

Biglouis you are fond of talking about how you were a mature student after years working as a library assistant- have I got that right? I assume that your degree was publicly funded? And that you probably got a grant while you studied? You also talk about living in an estate that you hated. Wasn’t that subsidised? What about the housing you had before becoming a student?

Your early education was free, I assume? As was healthcare, immunisations and so on. You have had police protection (whether you’ve needed it or not), defence spending has meant that the country has not been attacked for most people’s lifetimes. Roads, libraries, public services of all kinds have been available to you. From whom was the money stolen to provide all of that?

You talk about avoiding paying taxes on your ‘side hustle’. Who mends potholes, builds the roads you use, funds the university you worked in (few staff cover their own salaries unless their research is in a lucrative field) and so on whilst you don’t pay in?

BevSec

growstuff

biglouis

Taxes are a legalised form of theft.

What a ridiculous statement.

Biglouis quite correct!

So how would you pay for roads and schools and the NHS and street lighting and the police and the fire service and the army and all the other unconsidered facilities and services we all take for granted as we go aabout our lives?

We have a strategy to deal with empty homes in Wales.
senedd.wales/laid%20documents/cr-ld12797/cr-ld12797%20-e.pdf

I don’t know if there is an equivalent in England?

In practice, the problem in fully implementing the strategy is down to resources. Councils are really struggling due to the cutbacks, and it is time consuming and expensive to track down owners where they can be found, and work with them to bring properties back to a state where they are fit for rent or sale. Would the people who want empty houses brought into use be in favour of additional funding for councils to do this? I would.

growstuff

biglouis

Taxes are a legalised form of theft.

What a ridiculous statement.

Biglouis quite correct!

I agree that houses standing empty should be targeted. Where I live there are whole villages that have been killed off by holiday homes. The school, shop, surgery etc are no longer viable, and nor are things like Scouts, the WI, choirs and so on. Older people in particular are marooned in winter, as bus services have been cut and there is nothing going on in the village.

As I say, caravan parks are not remotely the same. They bring people in ‘in season’ who spend locally but aren’t taking the place of locals in any way. The parks provide employment for locals, too. When the owners aren’t there it doesn’t matter. They are not using up homes that others could live in - legally that is not allowed, as there are different regulations for residential parks. Caravan owners can’t register with doctors or take spaces in schools for instance - they can’t even have mail delivered to the park as that would mean it counted as a residence.

We have one near my sister, and we thought all of this through when deciding whether to buy it. Buying a cottage would have been much more cost-effective, but we couldn’t do that in conscience. We could have rented when we visited family, but that would still be propping up the economy that ruins village life. We settled on this as a low impact alternative.

I repeat that I would not advise it as a financially sound decision, but unless I’m missing something I don’t think that socially it is reprehensible at all.

No mention of all the houses standing empty. With this budget, employers are going to be reducing their workforce. So...fewer jobs, more unemployed...people unable to pay the mortgage, so having to sell their houses and find somewhere to rent. More people claiming housing benefits. Yet the government is still determined to build more new houses.
Imagine if we all applied these principles to our own domestic budget.

vegansrock yes there needs to be some disincentive to retaining empty houses for very long periods but there wasn’t. Why not? Also we need to bar foreign ownership of property. The property market should work for people living here and not as an investment vehicle for foreign investors. Socialism seems a bit of a non starter in this area policy area.

There should be a huge tax on homes left unoccupied for years on end. It was a good budget in my opinion.

Forgot to say, they also have a holiday house in another country!

I know someone who has a second holiday home (brick built house in a village), a static caravan in another area, and a beach hut (not a good description, this one has a full cooker and heating system but no mains sewerage) in a third. None are available for holiday lets so I really do think they impact on the local areas. Unoccupied they contribute zero money to the local economy, although I accept they do not impact school or medical services. I suppose I just think nobody should have a second home until everybody has a first one.