Predictions on next govt personal allowances/rates?
Discussion
Mine are:
Fairly quickly:
ISA down from £20,000 to £8,000
JISA down from £9,000 to £3,000
Pension lifetime allowance £1M with special treatment for NHS consultants.
Within first term:
Equalisation of CGT and income tax rates
Additional tax rate up to 50%
Additional tax rate applies to sale of non-primary residence
Pension tax relief at flat 30%
Pension annual contribution allowance down to £30k
All on the basis that these only affect the super rich, those with the broadest shoulders etc.
Fairly quickly:
ISA down from £20,000 to £8,000
JISA down from £9,000 to £3,000
Pension lifetime allowance £1M with special treatment for NHS consultants.
Within first term:
Equalisation of CGT and income tax rates
Additional tax rate up to 50%
Additional tax rate applies to sale of non-primary residence
Pension tax relief at flat 30%
Pension annual contribution allowance down to £30k
All on the basis that these only affect the super rich, those with the broadest shoulders etc.
The current ISA allowance is a massive giveaway imo. In the developed economies it seems that tax free investment returns have strict rules around them, has to be in European equities, minimum holding period 5 to 10 years, 5k annual allowance, 150 lifetime allowance for examples.
20k per couple over 5 years is 200k which is an average lifetime investments per couple i would say working in financial planning.
200k is alot to be kept away from entirely from taxation, especially if its all just invested offshore in global funds etc.
10k per annum and bring cgt in line with income taxes. This is coming from someone who has done very (relative to my salary) well out of stock market recoveries from financial crisis 08/09 and covid lows, all in an ISA so no tax whilst for a few clicks of a mouse...
20k per couple over 5 years is 200k which is an average lifetime investments per couple i would say working in financial planning.
200k is alot to be kept away from entirely from taxation, especially if its all just invested offshore in global funds etc.
10k per annum and bring cgt in line with income taxes. This is coming from someone who has done very (relative to my salary) well out of stock market recoveries from financial crisis 08/09 and covid lows, all in an ISA so no tax whilst for a few clicks of a mouse...
I would be very surpised if ALL of these happened, although I would be fairly confident that the incoming Labour Government will make some changes outside of the NI, VAT, Income tax commitments they have already made. They have been very clever in their responses to questions around tax - "we have no plans to increase tax............"
For what its worth I could see some tweaking to the following.
CGT
Pension Tax relief
Pension annual allowance
I don't think we will see any changes to corporation tax, IHT, or a wealth tax.
We will find out soon enough!
For what its worth I could see some tweaking to the following.
CGT
Pension Tax relief
Pension annual allowance
I don't think we will see any changes to corporation tax, IHT, or a wealth tax.
We will find out soon enough!
PhilboSE said:
Mine are:
Fairly quickly:
ISA down from £20,000 to £8,000
JISA down from £9,000 to £3,000
Pension lifetime allowance £1M with special treatment for NHS consultants.
Within first term:
Equalisation of CGT and income tax rates
Additional tax rate up to 50%
Additional tax rate applies to sale of non-primary residence
Pension tax relief at flat 30%
Pension annual contribution allowance down to £30k
All on the basis that these only affect the super rich, those with the broadest shoulders etc.
How do you define super rich?Fairly quickly:
ISA down from £20,000 to £8,000
JISA down from £9,000 to £3,000
Pension lifetime allowance £1M with special treatment for NHS consultants.
Within first term:
Equalisation of CGT and income tax rates
Additional tax rate up to 50%
Additional tax rate applies to sale of non-primary residence
Pension tax relief at flat 30%
Pension annual contribution allowance down to £30k
All on the basis that these only affect the super rich, those with the broadest shoulders etc.
R.
PhilboSE said:
Mine are:
Fairly quickly:
ISA down from £20,000 to £8,000
JISA down from £9,000 to £3,000.
Can certainly see a lifetime allowance of around 100k being introduced.Fairly quickly:
ISA down from £20,000 to £8,000
JISA down from £9,000 to £3,000.
PhilboSE said:
Pension lifetime allowance £1M with special treatment for NHS consultants..
Legislative nightmare to implement. Easier & more cost effective to go after the annual contributions.PhilboSE said:
Within first term:
Equalisation of CGT and income tax rates
Additional tax rate up to 50%
Additional tax rate applies to sale of non-primary residence
Pension tax relief at flat 30%
Pension annual contribution allowance down to £30k
All possible. Equalisation of CGT and income tax rates
Additional tax rate up to 50%
Additional tax rate applies to sale of non-primary residence
Pension tax relief at flat 30%
Pension annual contribution allowance down to £30k
The Leaper said:
How do you define super rich?
R.
It’s not a case of how I define it. That will be the justification used.R.
To be fair, I do think that the (J)ISA allowances are pretty generous and only available to be fully utilised year on year by the wealthy by any reasonable definition.
Last time they were in power Labour equalised the tax rates on income and capital gains. HOWEVER, since then,
Indexation has been abolished, and
The annual allowance has all-but been abolished
which leaves CGT as a straight "tax on inflation".
I don't think Labour would be daft enough to just rock up and equalise rates against that background - it could bring the whole economy to a shuddering halt. There would be,
Huge disincentive for anyone to ever invest in anything, and
Huge disincentive for anyone to ever sell anything.
They might well move basic CGT from 20% to 30%
The ISA allowance is an interesting question and I guess it could be reduced. In some ways that's not really necessary because an increased CGT rate combined with all-but removal of the annual CGT allowance is probably enough to deter people from selling investments to switch into ISA. A ruse that many will have been using relentlessly for a number of years.
IHT? Well, Agricultural Relief and Business Relief might be seen as soft targets.
And how about some tax on gifts made during lifetime as opposed to on death? The current 7 year rule essentially makes IHT a voluntary tax for the very wealthy. Back in the day there used to be a tax called Capital Transfer Tax which was essentially the same as IHT but with two sets of rates, say 20% during lifetime and 40% on death. I believe this is already happening under the IHT regime if assets are put into trust during lifetime.
Indexation has been abolished, and
The annual allowance has all-but been abolished
which leaves CGT as a straight "tax on inflation".
I don't think Labour would be daft enough to just rock up and equalise rates against that background - it could bring the whole economy to a shuddering halt. There would be,
Huge disincentive for anyone to ever invest in anything, and
Huge disincentive for anyone to ever sell anything.
They might well move basic CGT from 20% to 30%
The ISA allowance is an interesting question and I guess it could be reduced. In some ways that's not really necessary because an increased CGT rate combined with all-but removal of the annual CGT allowance is probably enough to deter people from selling investments to switch into ISA. A ruse that many will have been using relentlessly for a number of years.
IHT? Well, Agricultural Relief and Business Relief might be seen as soft targets.
And how about some tax on gifts made during lifetime as opposed to on death? The current 7 year rule essentially makes IHT a voluntary tax for the very wealthy. Back in the day there used to be a tax called Capital Transfer Tax which was essentially the same as IHT but with two sets of rates, say 20% during lifetime and 40% on death. I believe this is already happening under the IHT regime if assets are put into trust during lifetime.
Zaichik said:
Doing any of these would be a mistake as they disincentivise saving and probably won’t raise any revenue.
They also penalise those climbing the ladder who aspire to start pensions or other investments.
Though aspiration and motivation are probably just what the Labour Party despise.
Utter bThey also penalise those climbing the ladder who aspire to start pensions or other investments.
Though aspiration and motivation are probably just what the Labour Party despise.
ks. Most normal people would be unaffected by them, and if anything the fifth one increases the value of pensions to the lower/middle paid. There's way too much protection from tax for income from wealth in the UK, which results in loading taxes onto work instead, and pretty much all of the OP's suggestions help rebalance that. If you actually want to encourage savings and pensions for normal people you need to make sure they have surplus income; protecting rich people from taxes on growth in their wealth absolutely does not help with this.
E63eeeeee... said:
Utter bks. Most normal people would be unaffected by them, and if anything the fifth one increases the value of pensions to the lower/middle paid. There's way too much protection from tax for income from wealth in the UK, which results in loading taxes onto work instead, and pretty much all of the OP's suggestions help rebalance that.
If you actually want to encourage savings and pensions for normal people you need to make sure they have surplus income; protecting rich people from taxes on growth in their wealth absolutely does not help with this.
increasing tax on people who invest/save will not be a incentive for those who don't - the stated goal of labour is growth - that will come from investment not from the government taking more in taxks. Most normal people would be unaffected by them, and if anything the fifth one increases the value of pensions to the lower/middle paid. There's way too much protection from tax for income from wealth in the UK, which results in loading taxes onto work instead, and pretty much all of the OP's suggestions help rebalance that. If you actually want to encourage savings and pensions for normal people you need to make sure they have surplus income; protecting rich people from taxes on growth in their wealth absolutely does not help with this.
Zaichik said:
E63eeeeee... said:
Utter bks. Most normal people would be unaffected by them, and if anything the fifth one increases the value of pensions to the lower/middle paid. There's way too much protection from tax for income from wealth in the UK, which results in loading taxes onto work instead, and pretty much all of the OP's suggestions help rebalance that.
If you actually want to encourage savings and pensions for normal people you need to make sure they have surplus income; protecting rich people from taxes on growth in their wealth absolutely does not help with this.
increasing tax on people who invest/save will not be a incentive for those who don't - the stated goal of labour is growth - that will come from investment not from the government taking more in taxks. Most normal people would be unaffected by them, and if anything the fifth one increases the value of pensions to the lower/middle paid. There's way too much protection from tax for income from wealth in the UK, which results in loading taxes onto work instead, and pretty much all of the OP's suggestions help rebalance that. If you actually want to encourage savings and pensions for normal people you need to make sure they have surplus income; protecting rich people from taxes on growth in their wealth absolutely does not help with this.
Zaichik said:
Doing any of these would be a mistake as they disincentivise saving and probably won’t raise any revenue.
They also penalise those climbing the ladder who aspire to start pensions or other investments.
Though aspiration and motivation are probably just what the Labour Party despise.
Re your second point on penalisation, there is an influential and vocal enough side of the Labour Party that don’t care about logic, reasoning or predictable consequences. They just want to penalise people not like them.They also penalise those climbing the ladder who aspire to start pensions or other investments.
Though aspiration and motivation are probably just what the Labour Party despise.
Re the first point, it’s reducing the allowances not abolishing them. So the average middle income person who uses ISAs / SIPP at a lower level won’t be affected.
To be honest although all the things I listed would affect me, I wouldn’t protest too much over any of them. I’ll reserve my anger for some of the more egregious taxes I think will come in a second term.
PhilboSE said:
Zaichik said:
Doing any of these would be a mistake as they disincentivise saving and probably won’t raise any revenue.
They also penalise those climbing the ladder who aspire to start pensions or other investments.
Though aspiration and motivation are probably just what the Labour Party despise.
Re your second point on penalisation, there is an influential and vocal enough side of the Labour Party that don’t care about logic, reasoning or predictable consequences. They just want to penalise people not like them.They also penalise those climbing the ladder who aspire to start pensions or other investments.
Though aspiration and motivation are probably just what the Labour Party despise.
Re the first point, it’s reducing the allowances not abolishing them. So the average middle income person who uses ISAs / SIPP at a lower level won’t be affected.
To be honest although all the things I listed would affect me, I wouldn’t protest too much over any of them. I’ll reserve my anger for some of the more egregious taxes I think will come in a second term.
If half of that list came in I’d be making moves somewhere else I think.
We fill all our allowances, which obviously is a very nice position to be in. But in order to do so we have paid the vast majority of our income away at top rate. The thought that we are getting an easy ride sickens me really. Especially given most of the people worrying about ‘rich’ people contribute bugger all and have access to all the same tax incentives I do, if not more in the case of pensions.
I think they need to tread carefully, especially for things that only really affect a small group of people, and order to benefit, those people by and large would have paid a lot of tax already.
CGT on investments is one thing I’d be happy to see increase, people with real money vs wage slaves like me get a far easier ride it feels.
We fill all our allowances, which obviously is a very nice position to be in. But in order to do so we have paid the vast majority of our income away at top rate. The thought that we are getting an easy ride sickens me really. Especially given most of the people worrying about ‘rich’ people contribute bugger all and have access to all the same tax incentives I do, if not more in the case of pensions.
I think they need to tread carefully, especially for things that only really affect a small group of people, and order to benefit, those people by and large would have paid a lot of tax already.
CGT on investments is one thing I’d be happy to see increase, people with real money vs wage slaves like me get a far easier ride it feels.
Edited by okgo on Saturday 15th June 13:44
E63eeeeee... said:
the reason normal people don't save money in the UK is not because of tax levels on savings, it's because they can barely (or can't) afford to live day to day.
I'm no socialist. However, the point you make is bang on target.UK needs to (a) get people into work, and (b) pay them for being at work. Which is partly chicken-and-egg.
The current delusion that UK can be a nice, comfy Western economy while competing with China and India is absolute hogwash. Politicians must stop making promises they don't have a prayer of delivering.
My concern with "tax rises" is people who've got money may simply stop spending, further depressing the economy as a whole.
okgo said:
CGT on investments is one thing I’d be happy to see increase, people with real money vs wage slaves like me get a far easier ride it feels.
Fine, but the danger is of destroying any incentive for people to take risks with their money, which is the whole basis of a capitalist economy. A delicate juggling act is required.Panamax said:
Fine, but the danger is of destroying any incentive for people to take risks with their money, which is the whole basis of a capitalist economy. A delicate juggling act is required.
Perhaps. But it does target those TRULY with the broadest shoulders - was it the Notting Hill area that paid more CGT than the major northern cities combined? The rates are extremely reasonable vs income tax. IMO.
They can’t really keep squeezing earners at both ends of the scale (freezing allowance) and reducing top rate banding/increasing take. It’s already. A huge burden on a relatively small amount of people. And as a say, proper wealth can get away with paying less than half what I do.
okgo said:
We fill all our allowances, which obviously is a very nice position to be in. But in order to do so we have paid the vast majority of our income away at top rate. The thought that we are getting an easy ride sickens me really. Especially given most of the people worrying about ‘rich’ people contribute fk all and have access to all the same tax incentives I do, if not more in the case of pensions.
I’m in a similar position and share the sentiment of annoyance of being labelled as someone who should pay more tax when in actuality I have paid both rates and amounts of tax beyond the comprehension of some people who demand I contribute more, whilst at the same time holding out their hand.Being fair, although everyone has access to the tax incentives, very very few can utilise them to the max.
With “no plans” to increase tax, Labour will be keen to throw a few bones to the Left and reducing allowances can be pitched as upholding this yet still be targeted at their non-core voters.
Of course, when this fails to make either immediate or significant impact, I expect a complete row back on the “no plans” tax pledge, and we’ll see the really bad ones come in. But that will be a topic for another thread…
Edited by PhilboSE on Saturday 15th June 14:17
It would be preferable for Labour to publish their plans in their manifesto. We would actually have a chance to make a decision based on facts, rather than things they "don't have any plans for"
I've been shafted by the Conservatives but get the feeling I'm going to receive a second dose from Labour.
I've been shafted by the Conservatives but get the feeling I'm going to receive a second dose from Labour.
fbwinston said:
I've been shafted by the Conservatives but get the feeling I'm going to receive a second dose from Labour.
It's hard to disagree with that. It's ridiculous that Rishi keeps talking about "tax cuts" when taxes for most people are definitely still increasing.I think it's nuts that tax rates are essentially higher for working people than they are for non-working people. National Insurance has, over the years, simply run out of control.
Personally I think the Conservatives have missed a trick. Don't hold me to the figure but I think there could have been a worthwhile message along the lines, "We're completely abolishing National Insurance for employees and will add [3]% to Income Tax right across the board to replace it".
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