From the Department of We're All In It Together...

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Re: From the Department of We're All In It Together...

#81  Postby Ironclad » Mar 27, 2014 2:02 pm

The people who have managed to hoard the most money are exempt from being taxed, some of them are protected too.
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Re: From the Department of We're All In It Together...

#82  Postby azeed » Mar 27, 2014 2:12 pm

ED209 wrote:how about having an elective 'family home' exemption


Give them a choice to rent it and a right-to-buy option they can exercise at any time later on. They won't lose the family home - but if they want it they will have to earn it same as everybody else.

I don't think inheritance supporters fully appreciate how much more the majority of people would stand to "inherit" if we banned inheritance. All of the wealth generated by society would be recycled evenly back into society. Everybody would benefit equally from economic growth. This would have a dramatic effect on democracy as well as personal wealth. Power follows money and so the elimination of dynastic elites would shape politics more according to the wishes of the people rather than being the mechanism by which people are exploited to serve the interests of the rich.

If there is a scale with narrow-minded self-interest at one end and deep understanding of what it means to be part of a society at the other, support for inheritance determines where you stand on that scale.

If you want to leave something of great value to your sons and daughters leave them a vibrant, healthy, democratic society. Individuals cannot succeed unless opportunities are created for everyone.
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Re: From the Department of We're All In It Together...

#83  Postby minininja » Mar 27, 2014 2:22 pm

ED209 wrote:
And the need to find that £80k may force the home to be sold out from under surviving family members.

Instead of yet another torydem tax break for millionaires, how about having an elective 'family home' exemption that would allow one (biological) person to bequeath one property to one person exempt of inheritance tax, on the condition that as soon as that property is divided or sold the FULL value is treated as a capital gain?

It stays a family home, then no tax. it's ever sold, then it gets taxed more highly than now. You could limit this exemption to £1m and even reduce the £325k accordingly.

To be honest I wouldn't mind an exception for a family home since there is such a stupid situation with house prices. But as it stands most houses are either sold or let out to rent anyway - there are very few multi-generational homes under one roof. And it would have to be carefully managed, otherwise the person inheriting - if they already have another property, they could move into the elected 'family home' and sell or rent their own home to collect the inheritance that way.

Actually, scratch that - azeed's suggestion is much better anyway. If the tax leaves them short on the family home, let them rent it or buy back the difference over time through the local council.
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Re: From the Department of We're All In It Together...

#84  Postby ED209 » Mar 27, 2014 2:29 pm

Rent it or buy it back from whom? Are you having ownership default to the gubbermint now?
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Re: From the Department of We're All In It Together...

#85  Postby mrjonno » Mar 27, 2014 2:36 pm


To be honest I wouldn't mind an exception for a family home


Surely if there is no family in it, ie just a retired couple its no longer a family home. I would rather have a 'bedroom' tax' for those with lots of capital than those with no capital (ie the poor).

This isnt really about economics (and the thread shouldn't be here), its about politics and priorities
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Re: From the Department of We're All In It Together...

#86  Postby Banzai! » Mar 27, 2014 2:43 pm

far left cloud cuckoo land ahoy!

Are people seriously advocating a system that when you are dead "everything" you own at death goes straight to the state?

I work so that i can provide for my children's future, but I now work for "everyone" instead? pseudo-Marxist nonsense.

Most places that have done away with death taxes have gone the other way entirely and axed it in favour of the beneficiaries of the deceased getting the lot.
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Re: From the Department of We're All In It Together...

#87  Postby mrjonno » Mar 27, 2014 2:53 pm

I work so that i can provide for my children's future, but I now work for "everyone" instead? pseudo-Marxist nonsense.


Actually in the UK I work so others can leave money to their children, if you are elderly and keep everything you own in your house the tax payer gives you money to live on. Then when you die you give your house to your kids subsidised by me.

I would have thought it was right wing libertarianism to expect an adult to take care of their own finances instead of expecting others to bail them out. How about instead of working for your adult children's future you work for your own future and not expect a socialist bailout when you get older
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Re: From the Department of We're All In It Together...

#88  Postby Strontium Dog » Mar 27, 2014 3:40 pm

mrjonno wrote:High inheritance tax is a good cure for rampant house inflation (not as good as capital gains tax on any house prices but its a start)


Some people see it as a problem that inheritors won't be able to amass a property portfolio from their antecedents, go figure.

I don't see it as a problem if someone inheriting a house will be forced to return it to the market. Not even slightly.
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Re: From the Department of We're All In It Together...

#89  Postby Banzai! » Mar 27, 2014 3:45 pm

mrjonno wrote:
I work so that i can provide for my children's future, but I now work for "everyone" instead? pseudo-Marxist nonsense.


Actually in the UK I work so others can leave money to their children, if you are elderly and keep everything you own in your house the tax payer gives you money to live on. Then when you die you give your house to your kids subsidised by me.

I would have thought it was right wing libertarianism to expect an adult to take care of their own finances instead of expecting others to bail them out. How about instead of working for your adult children's future you work for your own future and not expect a socialist bailout when you get older


actually, i don't believe that is the case, assets including the main residence are taken into account when assessing for care costs, the minimum income guarantee might give you a liveable (just) income but you are all a long way from reality in the vast majority of cases.
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Re: From the Department of We're All In It Together...

#90  Postby minininja » Mar 27, 2014 4:00 pm

ED209 wrote:Rent it or buy it back from whom? Are you having ownership default to the gubbermint now?

Well if the government is taxing you on a transfer of wealth and you can't pay that tax (because it's all tied up in property), it is the government that you owe. So you might need to sell the house to pay the tax. But to avoid that, if the house has value as a family home, the government could accept the tax as part-ownership of the home and the family could pay back over time. That way nobody is avoiding inheritance tax just because it's in the form of property, and nobody has to sell their family home. Everybody wins.
[Disclaimer - if this is comes across like I think I know what I'm talking about, I want to make it clear that I don't. I'm just trying to get my thoughts down]
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Re: From the Department of We're All In It Together...

#91  Postby mrjonno » Mar 27, 2014 4:27 pm


actually, i don't believe that is the case, assets including the main residence are taken into account when assessing for care costs, the minimum income guarantee might give you a liveable (just) income but you are all a long way from reality in the vast majority of cases.


Pensions will be topped up by the state if you are on a low income/low savings. You house does not count, the government is planning on changing it to fixed rate but that hasn't been implemented yet
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Re: From the Department of We're All In It Together...

#92  Postby Beatsong » Mar 27, 2014 4:40 pm

Emmeline wrote:Have I got this right?

If a person's house & estate amounts to £525,000 & they wish to leave it split between 2 children & 4 grandchildren, the £200,000 above the tax threshold would be taxed at 40%, meaning that the government gets £80,000 of their money before it's split between 6 people. We're not talking about the super rich here are we?


According to this wiki page:

http://en.wikipedia.org/wiki/Inheritanc ... Kingdom%29

it's a little more complicated than that due to the potential for pooling the tax-free rate of a married couple. And of course plenty of other ways of avoiding the tax.

But according to the same page, in 2007 only 6% of estates had to pay any IT at all. The Guardian article put that at 3% - not sure why the difference. But either way you're right, we're not talking about the SUPER rich - but we are talking about a pretty small minority of the population. And even of that minority, a lot are only going to be paying a pretty small rate overall, like the 17% that your example comes out at.

I think that while everyone (including themselves) knows that the Queen and the Duke of Westminster are a world apart, a lot of upper middle class people fail to realise just how far up the scale of wealth across the country as a whole they are - ie just HOW MANY people there are below them, for whom the idea of ever having £325,000 worth of assets (or double that for a couple) to leaves their kids is just laughable. Many of these are the people that actually need the things the government spends tax money on.
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Re: From the Department of We're All In It Together...

#93  Postby mrjonno » Mar 27, 2014 4:47 pm

Inheritance tax = South East England tax.

Where you consider someone owning a house in the SE to be 'rich' is somewhat subjective (in my opinion the answer is yes).

The only way you can now basically buy a 'family' house in the London particular is inherit a lot of money, be an investment banker or run your own business. Salaries need to be well over £60k a year , in reality you need at least £30k to even survive in London without state support
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Re: From the Department of We're All In It Together...

#94  Postby Banzai! » Mar 27, 2014 4:48 pm

indeed, the house isnt counted for the MIG, but does count as soon as you need a nursing home which is where the massive costs really are.

People in the above £650k (IHT'able) house will usually have a private pension of some sort (and following auto enrolment even more will) and the MIG isnt really intended for them ,the costs involved to the state of this will be infitesimal compared to the overall state pension and other benefits costs.

I reckon this thread needs a dose of realism.
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Re: From the Department of We're All In It Together...

#95  Postby mrjonno » Mar 27, 2014 5:16 pm

Strontium Dog wrote:
mrjonno wrote:High inheritance tax is a good cure for rampant house inflation (not as good as capital gains tax on any house prices but its a start)


Some people see it as a problem that inheritors won't be able to amass a property portfolio from their antecedents, go figure.

I don't see it as a problem if someone inheriting a house will be forced to return it to the market. Not even slightly.


I would be less bothered about house wealth if there was a genuine free market which there is nothing remotely close to in the UK.
Th evils of planning permission and localism ensure that. What you currently have is people who have houses stopping people who want to build houses selling to people who want to buy them. The non-market is then subsidised by housing benefits and is a complete and utter mess.

The Tories did relax this a little bit but the problem is so enormous its not scratching the surface. Housing is the real problem in the UK, not debt, not the NHS not immigrants but no one is doing anything about it because a small majority are quite happy with the situation.

There should either be a totally free market in housing or a 100% capital gains tax on property so no one makes any money on rising house prices. Ideally house prices should go down in price like every other fixed asset does
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Re: From the Department of We're All In It Together...

#96  Postby OlivierK » Mar 27, 2014 9:49 pm

azeed wrote:
ED209 wrote:how about having an elective 'family home' exemption

Give them a choice to rent it

from whom?

azeed wrote:and a right-to-buy

at what value?

azeed wrote:option they can exercise at any time later on. They won't lose the family home - but if they want it they will have to earn it same as everybody else.

This doesn't appear to be a well thought-through idea.

Edit: That'll teach me not to read through to the end of the thread :doh:
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Re: From the Department of We're All In It Together...

#97  Postby azeed » Mar 28, 2014 12:04 am

Banzai! wrote:far left cloud cuckoo land ahoy!

Are people seriously advocating a system that when you are dead "everything" you own at death goes straight to the state?


Not what was said.

The idea was that the people inherit everything equally. Therefore everybody shares in economic success and your sons and daughters inherit more not less (unless you are rich). They will also inherit a healthy, functioning, democratic society with greater equality and therefore more opportunities for ordinary people.

This is a problem because...?
Last edited by azeed on Mar 28, 2014 12:21 am, edited 1 time in total.
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Re: From the Department of We're All In It Together...

#98  Postby azeed » Mar 28, 2014 12:15 am

ED209 wrote:Rent it or buy it back from whom? Are you having ownership default to the gubbermint now?


Estate re-distribution has to be managed by somebody. It doesn't matter who but a government department would be an obvious choice for this kind of thing.

You are right there are details to work out but they are just details. For example, you might implement this policy by adding the property to the portfolio of a local housing association and granting a tenancy agreement with a right-to-buy option at the normal market rate which the tenancy-inheritor may choose to take up any time they like. Something like this could also work for a farm which has been in the same family for generations.
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Re: From the Department of We're All In It Together...

#99  Postby laklak » Mar 28, 2014 2:03 am

"The People" can go fuck themselves.
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Re: From the Department of We're All In It Together...

#100  Postby azeed » Mar 28, 2014 5:14 am

I'm sure they'll be delighted to return the favour.
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