[Finance] Tax Rates Going Forward

[Westdene Seagull]

.
Yes, I know that - but it's not universal - there are different rates for various types of occupancty, reduced rates for single occupancy, and is often paid by housing benefit. Too may ways for people to use lawyers to reduce it. Where there's a loophole there's a way and all that..................


I get rather tired of the argument about not taxing poor little old ladies living in mansions.
1). The likelihood is that the house has already been paid for - no rent or mortgage to pay;
2). There is always an option to downsize - I'd love to be rolling about in a £1M house, so I could easily find half that for a very nice smaller property!
3). They can take out a lifetime mortgage to help pay the bills; that might also help them to get below the level at which they have to pay for care if they need it.
4). They can always approach the children - "Do you want to inherit my lovely big house when I pop my clogs? If so, perhaps you can help Mummy out a bit now".

Strange - I usually agree with your posts but this one I couldn't disagree with more. Let's take my parents as an example. Scrimped and saved to buy a modest house for £1,500 in 1966. They've decided to stay there all their married lives. Through times where my Dad was out of work and through times my Mum did a number of jobs just to pay the bills. For a few years myself and my two siblings got free school dinners. My parents paid all the tax they owed over those many years. They now obviously own the house outright. It's now 'valued' at over £500k. The rise in 'value' isn't their fault in the slightest. Yet you think they should be taxed on that 'value' and if they don't like it then they should downgrade ? Both my parents are frail and don't wish to move from the family home. Tax should only be paid based on affordability - people who have saved to buy things in life rather than piss their money up the wall shouldn't be taxed on some guessed 'value' of their property. If that were to happen I'd happily spend my money on a good accountant to avoid having to pay tax against my property 'value' later or indeed to ensure my children get a decent inheritance.

 

[Westdene Seagull]

Sorry, but who in the public sector are not working?

Brighton and House Council Adult Social Care are not working - try ringing them and enjoy the message they have recorded saying so.

 

[bha100]

Well....the use of personal service companies mainly came about because of the tax burden that was being placed on corporations and the tax advantages those companies had.

Today the rate of Corporation Tax is (for most companies) 19%. So a company making a profit of £100K would pay £19K in tax.

If that business had been a sole trader making the same level of profit, tax would be £27,500 PLUS National Insurance of >£4.5K

Hope I have demonstrated why business have set up Personal Services Companies! It is all down to successive governments favouring the big corporates over individuals.

"No man in the country is under the smallest obligation, moral or other, so to arrange his legal relations to his business or property as to enable the Inland Revenue to put the largest possible shovel in his stores. The Inland Revenue is not slow, and quite rightly, to take every advantage which is open to it under the Taxing Statutes for the purposes of depleting the taxpayer's pocket. And the taxpayer is in like manner entitled to be astute to prevent, so far as he honestly can, the depletion of his means by the Inland Revenue" [Lord Clyde Ayrshire Pullman Motor Services v Inland Revenue [1929] ]

Thanks, so anyone who employs her is in effect employing her company and she in turn does the work, why don't hmrc put a stop to this, it's clearly a way of legally avoiding tax, if i've read this correctly she paid just over £33,000 corporation tax, i can't work out how mach she earned from this tho

https://beta.companieshouse.gov.uk/company/07566633/filing-history

 

[blue-shifted]

Strange - I usually agree with your posts but this one I couldn't disagree with more. Let's take my parents as an example. Scrimped and saved to buy a modest house for £1,500 in 1966. They've decided to stay there all their married lives. Through times where my Dad was out of work and through times my Mum did a number of jobs just to pay the bills. For a few years myself and my two siblings got free school dinners. My parents paid all the tax they owed over those many years. They now obviously own the house outright. It's now 'valued' at over £500k. The rise in 'value' isn't their fault in the slightest. Yet you think they should be taxed on that 'value' and if they don't like it then they should downgrade ? Both my parents are frail and don't wish to move from the family home. Tax should only be paid based on affordability - people who have saved to buy things in life rather than piss their money up the wall shouldn't be taxed on some guessed 'value' of their property. If that were to happen I'd happily spend my money on a good accountant to avoid having to pay tax against my property 'value' later or indeed to ensure my children get a decent inheritance.

I'm reading that and seeing £498,500 of untaxed wealth ripe for treasury plucking

 

[The Merry Prankster]

Dealing with the contentious bit of Corbyn first, probably like you I did truly look at their tax elements of the last manifesto and also the documents by the architect behind it all (non Lansman), clearly a Marxist. That’s not an insult, he was. This guy went way beyond the bits we’re touching on here, he was emphatic about anyone having land (agricultural or residential) being taxed annually on its paper value regardless of whether they’re cash poor, and that residential/agricultural landowners should not gain when their land becomes available for housing. Instead compulsorily bought at arable land values, in effect gifting its new enhanced value to the nation. For many reasons I totally disagree with that form of command economy, the appropriation of someone’s assets, their rights.

At no stage was this ever Labour policy

 

[beorhthelm]

Having lived up North for 28 years, and as a regular visitor to Brighton, I completely agree with the jist. The rail / bus / tram / road network up here pisses all over the shambles that you guys have to endure. Leeds, Manchester and even the moneyed backwaters of North Yorkshire are similarly decent for the most part.

But, as I said, I've not heard one Northerner whining about transport links and wanting HS2. It's a total fallacy.

Plenty of them justifiably complaining that London is basically a separate state with the laws of the country applied to suit. But then that's true.

interesting view point. why do i see/read things about how bad the transport links are in the north, poor pan-pennines routes, buses for trains etc. when i pass through the roads on NE seem great by SE standards, where we're funneled on to 2 or 3 routes fed by A roads unfit for capcity, and east-west traffic generally hopeless.

 

[LlcoolJ]

Strange - I usually agree with your posts but this one I couldn't disagree with more. Let's take my parents as an example. Scrimped and saved to buy a modest house for £1,500 in 1966. They've decided to stay there all their married lives. Through times where my Dad was out of work and through times my Mum did a number of jobs just to pay the bills. For a few years myself and my two siblings got free school dinners. My parents paid all the tax they owed over those many years. They now obviously own the house outright. It's now 'valued' at over £500k. The rise in 'value' isn't their fault in the slightest. Yet you think they should be taxed on that 'value' and if they don't like it then they should downgrade ? Both my parents are frail and don't wish to move from the family home. Tax should only be paid based on affordability - people who have saved to buy things in life rather than piss their money up the wall shouldn't be taxed on some guessed 'value' of their property. If that were to happen I'd happily spend my money on a good accountant to avoid having to pay tax against my property 'value' later or indeed to ensure my children get a decent inheritance.

I guess they have done that then, and it's in trust for you. None of those pesky care home costs or inheritance tax.

I don't entirely disagree btw but that's a shockingly "I'm alright Jack" post.......

 

[LlcoolJ]

interesting view point. why do i see/read things about how bad the transport links are in the north, poor pan-pennines routes, buses for trains etc. when i pass through the roads on NE seem great by SE standards, where we're funneled on to 2 or 3 routes fed by A roads unfit for capcity, and east-west traffic generally hopeless.

Sheffield to Manchester is a bit shit but only because the trains stop running at 11pm on a Saturday night. So not great for a gig / night out. So you plan ahead (or forget and spend £80 on a taxi because Man U are at home and there are no hotels FFS).

Otherwise it's about 50 minutes, so similar to Brighton - Victoria, but the trains seem to actually run more often and aren't as rammed. Never had an issue and I've taken the train there loads.

I've never done the commute though so not qualified to comment by experience of that. Just anecdotal and what I've heard from people who do the Brighton / London drag every day.

I have driven all over the county of Yorkshire (sometimes three or four times a week) though, and the roads are definitely much better here. It's actually usually quite fun driving instead of a horrific grind...........

 

[Westdene Seagull]

I guess they have done that then, and it's in trust for you. None of those pesky care home costs or inheritance tax.

I don't entirely disagree btw but that's a shockingly "I'm alright Jack" post.......

It might indeed be a "I'm alright Jack" post but it's also a post suggesting people that work hard all their life and don't piss their money up the wall with the hope the state might step in shouldn't be punished financially later in life just as long as they have stuck to the tax rules previously.

 

[nicko31]

Would like to see 2 new taxes

a) Annual property / land tax versus value. The levels of tax current paid on expensive properties is obscenely low. Would also encourage downsizing

b) Inheritance tax on pension pot. This was all tax free money in the first place and should be taxed before being passed on

 

[LlcoolJ]

It might indeed be a "I'm alright Jack" post but it's also a post suggesting people that work hard all their life and don't piss their money up the wall with the hope the state might step in shouldn't be punished financially later in life just as long as they have stuck to the tax rules previously.

So the house is in a trust then. OK.

Providing that is the case then the state WILL be stepping in should they need care. But you'll still get your half a mil, so that's alright.

I'm not sure what this "pissing up the wall" thing is either. It's not earned money, it's just being lucky and buying a house which has appreciated in value to a ridiculous level in comparison to anything that will ever happen again. Did a couple in exactly the same situation, doing exactly the same jobs, but making the decision / mistake not to buy the same house at the same time, "piss their money up the wall"?

No. They just made one bad decision and instead are (somewhere up to) £500k worse off.

Again, I don't entirely disagree with the gist, but it might have been better to use an example of "the parents of someone I know" instead as you can't be unbiased in this situation. And it's really obvious.....

 

[Westdene Seagull]

So the house is in a trust then. OK.

Providing that is the case then the state WILL be stepping in should they need care. But you'll still get your half a mil, so that's alright.

I'm not sure what this "pissing up the wall" thing is either. It's not earned money, it's just being lucky and buying a house which has appreciated in value to a ridiculous level in comparison to anything that will ever happen again. Did a couple in exactly the same situation, doing exactly the same jobs, but making the decision / mistake not to buy the same house at the same time, "piss their money up the wall"?

No. They just made one bad decision and instead are (somewhere up to) £500k worse off.

Again, I don't entirely disagree with the gist, but it might have been better to use an example of "the parents of someone I know" instead as you can't be unbiased in this situation. And it's really obvious.....

Not entirely sure why you think my parent's house is in a trust - it's not. My point is that thay have paid all the tax on everything they have ever earned ( my Dad, as an ex-bank manager, is anything but a rule breaker ). Therefore they shouldn't be penalised for following the rules nor should they be penalised for deciding on investing their income in a home rather than say family holidays to Florida ( that's what I mean about pissing money up the wall ). My reference to a trust, or tax avoidance as I called it, was based on what I want to happen to my property when I die. I want that money to go to my kids not the government. I paid tax on the income that paid for the investment in my home - I see no moral case why I should pay tax again on it.

Rise in property value is as much earned income as say income from the increase in share investments yet somehow you never see people suggesting a tax on share value ( I accept there might be CGT payable when sold if they aren't in a pension scheme but it's very easy to avoid with planning ). A tax on property value is nothing but an envy tax and it's not even based on real value and the value of property is only what someone is prepared to pay.

 

[amexer]

In comparison with raising income tax I dont know what would raise more but on the basis only pay when you spend wouldnt increasing VAT to 25% be better.

 

[LlcoolJ]

Not entirely sure why you think my parent's house in a trust - it's not. My point is that thay have paid all the tax on everything they have ever earned ( my Dad, as an bank manager, is anything but a rule breaker ). Therefore they shouldn't be penalised for following the rules nor should they be penalised for deciding on investing their income in a home rather than say family holidays to Florida ( that's what I mean about pissing money up the wall ). My reference to a trust, or tax avoidance as I called it, was based on what I want to happen to my property when I die. I want that money to go to my kids not the government. I paid tax on the income that paid for the investment in my home - I see no moral case why I should pay tax again on it.

Rise in property value is as much earned income as say income from the increase in share investments yet somehow you never see people suggesting a tax on share value ( I accept there might be CGT payable when sold if they aren't in a pension scheme but it's very easy to avoid with planning ). A tax on property value is nothing but an envy tax and it's not even based on real value and the value of property is only what someone is prepared to pay.

FFS. You said the house cost £1500 so how the hell were your parents "investing their income in a home instead of....." for all these years? I guess they've had plenty of holidays since it was paid off, and fair play to them. But you also conveniently ignored the point that should the same people have made one different decision, it would tar them with your "pissing it up the wall" brush (that sounds odd, sorry).

The trust point was just because you said that's what you would do and then ignored the question regarding your parents house. So it isn't, might be a good idea..... lol.

And yes, there is CGT on capital gains, apart from certain cases, primarily your PPR. But it is NOT earned income by any classification. The important classification being that it is "a capital gain" and nothing whatsoever to do with earnings. As you know.

I totally agree with that tax policy anyway, so stop digging!

 

[LlcoolJ]

In comparison with raising income tax I dont know what would raise more but on the basis only pay when you spend wouldnt increasing VAT to 25% be better.

If you want to tax poor people disproportionately more then yeah, great idea.

Weren't you sticking up for Johnson on another thread? Makes sense.

I'm guessing it's a wind up.

 

[Creaky]

I got full tax relief on the interest payments on my first mortgage - this tax allowance was phased out in 1983 and the MIRAS scheme with limits was then introduced - all tax relief on mortgage interest was finally phased out in 2000. There is little doubt that these tax reliefs helped to increase house prices.

So it’s fair to say that a good proportion of the value of our house is thanks to the Exchequer.

 

[Hampster Gull]

Leave it as a one off increase in our absolute debt level, load up with very long term bonds at super low interest rates, then get in with growing the economy by removing regulations and lowering tax whilst for the short term grow govt investment

 

[Weststander]

I got full tax relief on the interest payments on my first mortgage - this tax allowance was phased out in 1983 and the MIRAS scheme with limits was then introduced - all tax relief on mortgage interest was finally phased out in 2000. There is little doubt that these tax reliefs helped to increase house prices.

So it’s fair to say that a good proportion of the value of our house is thanks to the Exchequer.

Property price rises have mainly occurred in the post MIRAS world. People who bought homes in Brighton, Hove and Lewes in 1994, 1995 and 1996, have seen their values rise six fold or more. Under every government.

The main reason - supply and demand. Too few housing units exist in London, the SE and SW. Possibly millions of folk live in inadequate housing situations. The sofas of mates/family, B&B’s, ramshackled and illegal rooms squeezed into back-gardens, above shops or too many units in HMO’s, people in their 30’s living with family when they’d rather not.

Nimby councils and nimby residents oppose countless brownfield and greenfield developments, some councils run huge planning backlogs (Brighton), our current planning laws require huge and protracted expenditure on a couple of dozen types of consultants just to try and get outline planning permission. Small house builders have in the main been squeezed out due to all this.

We need to build millions more homes, obviously with a very significant proportion of affordables.

 

[Westdene Seagull]

FFS. You said the house cost £1500 so how the hell were your parents "investing their income in a home instead of....." for all these years? I guess they've had plenty of holidays since it was paid off, and fair play to them. But you also conveniently ignored the point that should the same people have made one different decision, it would tar them with your "pissing it up the wall" brush (that sounds odd, sorry).

The trust point was just because you said that's what you would do and then ignored the question regarding your parents house. So it isn't, might be a good idea..... lol.

And yes, there is CGT on capital gains, apart from certain cases, primarily your PPR. But it is NOT earned income by any classification. The important classification being that it is "a capital gain" and nothing whatsoever to do with earnings. As you know.

I totally agree with that tax policy anyway, so stop digging!

As an accountant I would have thought you would have understood £1,500 was a lot of money in 1966. They, and us as a family, have had some holidays - most very modest ones in Devon or Cornwall. My wider point is that people shouldn't be taxed on an asset they have made sacrifices to get and have no control over how it's value increases ( or possibly decreases ) if the tax has been paid on the money to buy said asset - especially one that can't really be valued without selling it. Tax at the point of income or sale and no more.

Equally to tax people on the value of their property ( excluding council tax or rates - poll tax was a far fairer way of paying for services ) is an unfair system - you might as well tax people on their shoe size.

 

[Westdene Seagull]

Property price rises have mainly occurred in the post MIRAS world. People who bought homes in Brighton, Hove and Lewes in 1994, 1995 and 1996, have seen their values rise six fold or more. Under every government.

The main reason - supply and demand. Too few housing units exist in London, the SE and SW. Possibly millions of folk live in inadequate housing situations. The sofas of mates/family, B&B’s, ramshackled and illegal rooms squeezed into back-gardens, above shops or too many units in HMO’s, people in their 30’s living with family when they’d rather not.

Nimby councils and nimby residents oppose countless brownfield and greenfield developments, some councils run huge planning backlogs (Brighton), our current planning laws require huge and protracted expenditure on a couple of dozen types of consultants just to try and get outline planning permission. Small house builders have in the main been squeezed out due to all this.

We need to build millions more homes, obviously with a very significant proportion of affordables.

I've given you a thumbs up with a condition. Brownfield sites should be fully developed first before even any consideration of greenfield sites. I say that as someone who is bitterly opposed to the development of Benfield Valley - if that makes me a NIMBY so be it.