One-off wealth tax : are you worried?
Discussion
trickywoo said:
There seems to be no shortage of people earning good money who can’t seem to pay tax due 18 months after they have earned it, looking for deferral etc.
A wealth tax would never work.
I think average household wealth is something like 300k? So use that as the starting threshold and it could gain popular favour. A wealth tax would never work.
If they can’t pay their tax bill, that would suggest they are not really that wealthy.
GT03ROB said:
I'd love to see the data that supports that!
Sorry it was 300k. Post first. Google after!https://www.ons.gov.uk/peoplepopulationandcommunit...
Lim said:
I think average household wealth is something like 300k? So use that as the starting threshold and it could gain popular favour.
If they can’t pay their tax bill, that would suggest they are not really that wealthy.
...and if you drill into that report & the data doesn't seem to add up, but what it actually shows is that of that figure the amount that is liquid is around 6k.If they can’t pay their tax bill, that would suggest they are not really that wealthy.
The rest is locked up in property, pensions & possessions
Lim said:
What is the proposed scope of any wealth tax? Is it even a thing?
Putting all cash into illiquid assets to point of not being able to pay a tax bill still doesn’t signal wealth to me.
There isn't any scope because it's only on the agenda of certain pressure groups. On the face of it Sunak has largely discounted it.Putting all cash into illiquid assets to point of not being able to pay a tax bill still doesn’t signal wealth to me.
It was a government report you were quoting. So ask them why they consider it wealth. I don't think the bulk of the population will consider themselves wealthy!
We're not particularly big earners, but have saved really hard, run second jobs and done up houses ourselves rather than plopping into overpriced executive new builds. We have bigger savings than friends who earn significantly more than we do, who spend it on cars and 4-5 expensive holidays a year. We have already paid tax on our savings. I can't see this going down well with the electorate.
There already is a wealth tax on your income (Income Tax and NI), one on you capital gains (CGT), one on most things you buy (VAT) and one on every property purchase (Stamp Duty).
Then of course there is another potential one upon death (IHT).
So I can't see this ever happening as after all this it is very difficult to justify a further one on the asset you are left with and it would be very difficult to even start to calculate it.
The only thing left is pensions, but that would also mean every polition, member of the civil service and all public sector workers taking a hit on their index linked DB pension schemes, which I also can't see happening.
Then of course there is another potential one upon death (IHT).
So I can't see this ever happening as after all this it is very difficult to justify a further one on the asset you are left with and it would be very difficult to even start to calculate it.
The only thing left is pensions, but that would also mean every polition, member of the civil service and all public sector workers taking a hit on their index linked DB pension schemes, which I also can't see happening.
GT03ROB said:
There isn't any scope because it's only on the agenda of certain pressure groups. On the face of it Sunak has largely discounted it.
It was a government report you were quoting. So ask them why they consider it wealth. I don't think the bulk of the population will consider themselves wealthy!
Ah okay. I thought it might be a ‘leak’. It was a government report you were quoting. So ask them why they consider it wealth. I don't think the bulk of the population will consider themselves wealthy!
Very little chance of a one off grab happening IMO. Hmrc already have enough knobs to twiddle for ongoing wealth tax?
Many find the 300k average (median) wealth figure surprising. But there is a lot of dosh splashing about. I don’t see any obvious reason to disbelieve the figure? I assume it means net after debt. Ifd be interested to see the figure without pensions.
Edited by Lim on Sunday 31st January 08:49
I think the most likely tax to be increased is VAT, mentioned by Julian above. For instance the rate could be increased selectively on different goods and/sales channels (internet vs physical shops).
CGT, again mentioned by Julian, no longer has any inflation indexation. If someone bought a BTL in 2000 for £100k and sells it today for the same real price, say £200k, they are taxed on the £100k numerical gain even though they have received no increase in benefit. I.e. after the tax has been paid they can no longer afford the same house they bought in 1990. That’s a straight wealth tax.
CGT, again mentioned by Julian, no longer has any inflation indexation. If someone bought a BTL in 2000 for £100k and sells it today for the same real price, say £200k, they are taxed on the £100k numerical gain even though they have received no increase in benefit. I.e. after the tax has been paid they can no longer afford the same house they bought in 1990. That’s a straight wealth tax.
rockin said:
I think the most likely tax to be increased is VAT, mentioned by Julian above. For instance the rate could be increased selectively on different goods and/sales channels (internet vs physical shops).
CGT, again mentioned by Julian, no longer has any inflation indexation. If someone bought a BTL in 2000 for £100k and sells it today for the same real price, say £200k, they are taxed on the £100k numerical gain even though they have received no increase in benefit. I.e. after the tax has been paid they can no longer afford the same house they bought in 1990. That’s a straight wealth tax.
An extremely valid point mate and let's not forget the income tax you have already paid over the years on the rent together with the stamp duty at the start.CGT, again mentioned by Julian, no longer has any inflation indexation. If someone bought a BTL in 2000 for £100k and sells it today for the same real price, say £200k, they are taxed on the £100k numerical gain even though they have received no increase in benefit. I.e. after the tax has been paid they can no longer afford the same house they bought in 1990. That’s a straight wealth tax.
BTL was an incredible source of tax, yet they are hellbent on making it as unattractive as possible for investors.
Please excuse my typo with 'politicians' (above). I always seem to find a way of getting one into most of my posts!
JulianPH said:
So I can't see this ever happening as after all this it is very difficult to justify a further one on the asset you are left with and it would be very difficult to even start to calculate it.
Reality and practicality aside, there are many people for whom 'Tax the rich!' has a lovely sound. And would vote for it because to them it makes perfect sense to take money from rich people and give it to poor people... all the world's problems solved, hurrah.Attitude to tax seemed to change in the Blair years. Up to then it was common good sense that a person would want to pay as little tax as possible. Now, paying tax, and as much as possible, seems to be a virtue. As long as it's others paying of course!
Simpo Two said:
Attitude to tax seemed to change in the Blair years. Up to then it was common good sense that a person would want to pay as little tax as possible. Now, paying tax, and as much as possible, seems to be a virtue. As long as it's others paying of course!
I think we mix in very different circles! 
Never hear anyone I know signalling that!
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