I'll be interested to see what happens in Eastern Europe where a flat rate of tax is being imposed on business and income. It's not a progressive tax, but because it is flat, it means that the super rich simply cannot avoid paying their share no matter what accountant they employ.
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Same old Tories...
- Thread starter Moshe Gariani
- Start date
No, although a) how do you value that and b) who says that the government should own any percentage of that increase. IThe cynical side of me would immediately assume the government would want house prices continually high in order to take tax from the profits of deaths. This would completely contradict the government attempting to get people on the housing ladder...
Also my parents house value has increased by several factors Dad renovated it, ie added bedrooms and a bathroom for us three girls (so he could have his own bathroom without hairdryers and leg wax), the train line was also improved making the commute to the city quicker so house prices increased, and of course the market has gone up. Should we pay tax because of all three of those issues?
Indeed - very interesting!
If you are a decent accountant you would be able to sort out your clients' affairs so that they had no 'official' income, so would still pay no tax.
Eastern Europe is very corrupt, so the taxman can be easily bought off!
Lokki 7
WSU
You think? Surely the "super rich" would just base themselves in the Cayman Islands for tax purposes and carry on as usual? It seems to work quite well in this country, I don't see how a flat tax rate would change avoidance. What needs to be done is a tightening of the non-domicile laws. The problem is that politicians are too busy cosying up to the industrialists to make a stand. Far easier to tax Joe Bloggs on his poor old mums family home when she carks it.
Lord Bracknell
On fire
It seems fair enough to me to pay tax because the market has gone up. And also because the train line has improved. How much public money is going into the improved train service? It seems only right that if people are seeing their wealth grow because of that public spending, then they should be taxed on it. Not unduly taxed, but fairly taxed.
I thought they were changing the tax point to point of earnings? not defined by residence? might be wrong but thats what I thought...
Lokki 7
WSU
Perhaps, I do not know the proposed system so maybe have misunderstood what Sim was getting at.
Fair enough - it doesn't seem fair to me to pay tax on the market increasing which has little to do with the government, but more to do with economies and markets - so I guess we can agree to disagree - would we get it back if house prices fell I wonder?
I do see your point when public monies are spent and locals have seen a benefit in their house prices. But we should be encouraged to own our own homes, to see them rise in value and to provide the necessary retirement funds the government is struggling to provide. We shouldn't be taxed on that.
The Auditor
New member
It was on Jeremy Vine a few weeks ago - and to be honest I only listen to him in the background as he's a bit BBC meets The Daily mail sometimes...so I may have it wrong...
Pavilionaire
Well-known member
- Jul 7, 2003
- 31,112
There seems to be some notion here that the "rich" pay proportionally less tax than the rest - as an accountant I can confirm that this perception IS wrong.
Sure, there are ways you can plan to reduce the burden but this government has systematically attacked tax avoidance over a period of years, and this has included the reduction in the tax-efficient opportunities for "offshore" investment.
Re. the Tories - is this REALLY the best that they can come up with? If they were serious about getting elected they'd figure out a way to ABOLISH Inheritance Tax altogether, not tinker at the edges, i.e a 5-year freeze on Jobseeker's Allowance rates, a commitment to full withdrawala from the Middle East by 2009 etc.
I don't mind what they come up with, but they have to be BOLD because only by bold, clear, unequivocal policies will we ever find out what they stand for. Support her or not, Maggie made it clear she would privatise, attack the unions and get inflation under control.
This shilly-shallying around gives me the impression things really aren't too bad under Labour, in which case why should I then vote Tory?
Sure, there are ways you can plan to reduce the burden but this government has systematically attacked tax avoidance over a period of years, and this has included the reduction in the tax-efficient opportunities for "offshore" investment.
Re. the Tories - is this REALLY the best that they can come up with? If they were serious about getting elected they'd figure out a way to ABOLISH Inheritance Tax altogether, not tinker at the edges, i.e a 5-year freeze on Jobseeker's Allowance rates, a commitment to full withdrawala from the Middle East by 2009 etc.
I don't mind what they come up with, but they have to be BOLD because only by bold, clear, unequivocal policies will we ever find out what they stand for. Support her or not, Maggie made it clear she would privatise, attack the unions and get inflation under control.
This shilly-shallying around gives me the impression things really aren't too bad under Labour, in which case why should I then vote Tory?
sten_super
Brain Surgeon
But you've drawn increasing house prices into this, i.e. artifically created value. What if house prices became static? You buy a house with £350k of your own, hard-earned cash. When you die it is still worth £350k. You leave it to your children. But now they are left with a £40k tax bill?
Say you paid an average of 25% (on the low side for that value of house, but it's an estimate) income tax during the time you were paying the mortgage, and NI contributions of 11%. Assuming that you've paid for the whole thing from earnings, in total you have paid £135625 worth of tax just to acquire the money required to buy that house. Why is the government then allowed to take another 40% of the 'excess' value from you just because you've died?
We already pay income tax, council tax, road tax, etc to pay for improved train service (or whatever example of public spending you want to come up with). All that is happening is that you being hit for even more money.
You're not taxed on that, your estate is. If you have an estate worth £500,000 on death, the taxman will take 40%x(£500,000-£300,000)=£80,000, whereas your relatives will still have a not inconsiderable £420,000 to divide amonst themselves.
Only 6% of people who die currently pay any IHT. That percentage will rise, due to the discontinuity between property prices and the IHT threshold, but also due to rising wealth in the UK.
Personally, given a choice between paying more tax when I am alive compared to when I am dead, I would rather pay it when I am dead. If the Tories are offering me that choice then I will say 'No Thanks' when it comes to voting for them.
As an accountant who is an advisor to the HMRC special investigation unit, I would take issue with that comment!
Superphil
Dismember
It would reduce tax evasion, because when the Super Rich person wants to buy 10 cases of Kristal Champers, it will cost him £XXX and he will pay the tax at the point of purchase. When he buys his new Rolls Royce, or Aston Martin, it will have tax on it, which he will have to pay. When he buys a mansion, and the estate agents fees include VAT, he will have to pay it.
Pavilionaire
Well-known member
- Jul 7, 2003
- 31,112
IHT is double-taxation and, as has been pointed out, this surely is fundamentally wrong. The Tories must realise this, so why don't they have the balls to get rid?
Most people are intrinsically lazy and need incentives to work hard and look after their financial affairs. Abolition of IHT gives the message that whilst the government will take a whack when you earn the money they won't take a second slice later. This meassge will restore some trust between government and citizen.
Similarly, VAT is a form of double-taxation and the UK/EU could be working to get rates down. I personally think that Corporation Tax rates were too low and so the moves to increase are good, but the government needs to stop pissing about and reform National Insurance.
Most people are intrinsically lazy and need incentives to work hard and look after their financial affairs. Abolition of IHT gives the message that whilst the government will take a whack when you earn the money they won't take a second slice later. This meassge will restore some trust between government and citizen.
Similarly, VAT is a form of double-taxation and the UK/EU could be working to get rates down. I personally think that Corporation Tax rates were too low and so the moves to increase are good, but the government needs to stop pissing about and reform National Insurance.
But he could buy the Champers and Roller in France and pay French rates on it, so it would be easy to evade.
Lokki 7
WSU
Unless of course he buys a passport from New Guinea, domociles there and re-claims his VAT as a foreigner. There is always a way around these things, one of the few economic laws that actually seems to hold true in all circumstances.
But I've paid income tax on the money used to build up my estate, sales tax on the money I then used to buy the property and then my kid has to pay tax on this again? Thats my issue.