Am I being naive? How are they used for tax avoidance? In terms of not paying tax on it while still having the money to spend yourself?
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You could say the same for Cameron's austerity policy.
I don't know the specifics myself [not being an accountant] however it can be employed in that manner no question. I know someone who has worked in that area for years and it has been alluded to on numerous occasions.
If the government wish to cut down on tax avoidance they could always start by scrapping IHT, a rather debatable tax to begin with.
Inheritance tax?
It's aimed at fake overseas 'charities' where the money is donated tax free and used to fund money making activities and/or channelled back to the donator in some other way.
Ah right, thanks. Surely better to introduce heavy penalties where this is identified?
Yeah this is a well known scam which costs the exchequer a lot of money but of course they have bottled it yet again when faced with educated and wealthy challengers.
Companies do this for a much lower "fee" than the tax that would be due. Then swiss (or other) bank accounts are used and avoider/evader has most of their money back.
What do we all think of Chuka Umunna?
He's too tied to Ed, but he's been making a bit of a bold move to the New Labour camp of late...
He's too tied to Ed, but he's been making a bit of a bold move to the New Labour camp of late...
Got to say what i've seen of him , he's been impressive , defiantly one to watch.
He's a very smart article but he needs to stop this Blue Labour shit.
Apologies for not getting back to you sooner, but yeah that was the one.
It says on his Wiki that he was an advocate of "Blue Labour" policies, that might also be an issue for some among the Labour ranks.
What do you mean by the New Labour camp? Is Ed not New Labour in your eyes?
On Chuka Umunna, he comes across as a bit slippery and seems very up himself. At least, that's the impression that lots of people have of him. Definitely a future senior Labour figure, though. I don't think his closeness to Ed is a hindrance at all - in my view Ed Miliband is probably going to be the next Prime Minister and Umunna will take a major role in the cabinet. An Ed Miliband government should be the least divisive Labour government that the party will have ever seen - personality and idealogical allegiances will not be as prominent as they were under the Blair and Brown governments.
Whats dubious about inherritance tax? it's a tax on unearned wealth, about as fair you get
Got to disagree there TBH. People who work hard all their life and amass wealth AFTER PAYING TAX should be able to pass that onto their kids. If you have a progressive income tax there is absolutely no need for inheritance tax. The inheritance threshold should be set at the sum of your lifetime net earnings.
Tax happens in many transactions, why inheritance should be exempt is beyond me
Why should that be? It seems fair that they shouldn't be taxing it twice in someone's hands but when it becomes another person's income, I can't see any reason why it shouldn't be taxed.
Inheritance entrenches social divides. Personally I think the current IHT tax-free allowance is ludicrously generous.
Rather it is okay to have unearned wealth so long as you fall below some arbitrary limit. Or if you or yours don't live in certain parts of the country.
Is it OK to earn money without paying tax as long as you earn below some arbitrary limit?
That's how tax works.
My point there was to draw attention to the "dubious" nature of the tax. If it is simply a question of things unearned then the government should reach out its hand and take from all, not only some sections of the population.
Cameron really doesn't want another EU based altercation with his party any time soon, not with his government's future being worse than it was, the various scandals and such.
http://www.telegraph.co.uk/finance/...ne-hints-at-British-referendum-on-Europe.html
I was also just listening to the BBC's Frank Gardener describe Philip Hammond's plans for the army in tones verging on the scornful.
I don't believe that my children have any 'right' to my money after i'm dead. I'm only 35 and maybe that'll change with time but right now, I believe they obviously have a right to be taken care of while they're dependant on me but once they're old enough to earn their own living and be self-dependant, they have no right to my money. If I chose to leave them some money/property when I die, thats income for them and they should be taxed on it just like if their employer or a lottery gave it to them.
As far as the question of thresholds and limits is concerned, obviously thats arbitrary to an extent and sometimes unfair just like income tax is. Property tax is high because property value is high.
Are you in the UK? Lottery isn't taxed in the UK, and property tax isn't quite impacted by house values the same in the UK either.
The US thresholds have traditionally been a little more realistic. I think the 2012 estate tax exemption is $5 million.
No...in the US currently. I think that exemption is far too high. I don't see why my children should be able to inherit 5 million tax free. They haven't done anything to earn it except be born.
I encourage my parents to enjoy their retirement and support the charities they believe in. I certainly don't expect to be left anything and if they do choose to leave me some of their savings, I expect i'll have to pay tax on it just as if I earned income from any other source.
Its a tangential discussion, from what I understand, lottery income isn't taxed in the UK and some other countries in the winner's hands so as to create a sense of excitement. Anyway lotteries are taxed on revenue not profits so effectively tax is deducted at source.
"My point there was to draw attention to the "dubious" nature of the tax. If it is simply a question of things unearned then the government should reach out its hand and take from all, not only some sections of the population."
So you want to broaden inheritance tax to include every penny inherited?
Would you graduate it like we do with income tax paying higher amounts the more you inherit?
So you want to broaden inheritance tax to include every penny inherited?
Would you graduate it like we do with income tax paying higher amounts the more you inherit?
True, apartments and two bedroom properties on a par with or in excess of the current threshold hereabouts. Rural and urban areas similarly swept up in the net.
No, I'd be more inclined to scrap IHT for most if not all people. However if you wish to have such a tax then it should not be the case that it is in part one of geography.
Hypothetically speaking i suppose a flat rate would suffice. Perhaps it written into law that all such money goes toward services for the elderly. But not my preferred outcome.
The threshold should be based on lifetime taxable earnings, and the tax rate should only be 25% IMO. Maybe something like a threshold of 50% of your lifetime post tax earnings should not be taxed and everything above that should be 25%. That would give a threshold of around £300k for the average person.
Scrap some of the loopholes like trusts and early transfer, and then you end up with a fairer system where its based on what you actually earned, and declared, throughout your working life.
Scrap some of the loopholes like trusts and early transfer, and then you end up with a fairer system where its based on what you actually earned, and declared, throughout your working life.
I accept that, that is on one level unfair. On the other hand the increase in property prices which lead to this anomaly is also geographically based. So the benefit is also unfair in that broader sense. I wonder where you stand on the recent decision to pay different rates to public sector workers. Is that unfair because it is based on geography?
So are you saying that it is right that those who live in certain counties should be taxed upon their death and others not?
Logically i can understand why it might be considered for some job types, particularly in these economic times. Ideally it would be nice to believe that conditions in one place serves as a goad for the private sector yet that is more aspiration than reality. Will the government pursue such a regional mentality elsewhere, subsidised fuel for those who live in rural or distant communities? Doubtful by all accounts. The person(s) residing there shall suffer twice over. It would be fairer for some and considerably unfair for others i expect.
I might also say that IHT has more the air of a punishment and the above either opportunism or the mirroring of the a wider labour market however.
What's the relevance of all that though? The person being taxed is not the deceased, it's the heir, who's receiving unearned income.
No I don't think that is a fair basis to tax people on. That is why we don't tax people on that basis. I don't think it’s a fair basis to pay people on either. Not for doing the same work.
I don't want my inheritance because of the obvious reason. My parents are in their mid/ late seventies and the thought of calculating such matters leaves me cold. I would sooner they spend every penny they have earned on themselves and leave me nothing than think about it at all. If everyone did this then there would be no debate. I know it is not going to happen in reality.
I do find it ironic that the complaint here is about an ordinary family paying inheritance tax because of the price of property in certain areas. Would they sooner inherit the same value property as the other areas of the UK and avoid inheritance tax?
What is the point in reducing inheritance tax anyway if it means increasing general taxation? So people who aren't beneficiaries of any estate pay extra income tax, so that people who are can keep more/all of their inheritance. That wouldn't seem fair to me. I can't see any fairer way to raise tax money from inheritance than to look at the value of an estate and go from there.
This issue arises because of the insane lack of good regional policy. The govt bangs on about competing all the time but it only ever wants to talk about the employees working longer, having fewer rights and lower wages. It never talks about what it can do about cost of living, getting to work, house prices, the other end of the equation. Good regional policy could spread the opportunities around the whole country and prevent the property price gradient which is the main cause of the inheritance tax geographical imbalance.
http://www.guardian.co.uk/politics/...lling-economy?commentpage=4#start-of-comments
Gideon
He's beyond parody now.
Gideon
He's beyond parody now.
I see theres been another "man of the people" response by our gracious Prime Minister today.
http://order-order.com/2012/06/11/union-turns-on-blairites-in-labour-bloodbath/
This has gone down INCREDIBLY badly with party members and shadow cabinet...
This has gone down INCREDIBLY badly with party members and shadow cabinet...
http://www.bbc.co.uk/news/uk-politics-18427976
So two further u-turns down the road perhaps, one controversial the other not so much.
Oh and Sadiq Khan putting across the impression that Labour has no consistent transport policy to speak of as yet. Sounded rather petulant too.
So two further u-turns down the road perhaps, one controversial the other not so much.
Oh and Sadiq Khan putting across the impression that Labour has no consistent transport policy to speak of as yet. Sounded rather petulant too.
I always feel uneasy when Sadiq Khan is put up to defend/attack something. He's a bit of a nothing man.
This is deeply, deeply worrying
http://www.guardian.co.uk/uk/2012/jun/20/g4s-chief-mass-police-privatisation
http://www.guardian.co.uk/uk/2012/jun/20/g4s-chief-mass-police-privatisation
Have we not been heading down this road already? And is it all uniformly unacceptable?
A couple of years ago i remember seeing a report about a community who had hired in private security to respond to incidents of anti-social behaviour and burglaries, because the police cold not be relied upon to arrive at the scene or take them seriously. This wa deeply worrying and signal, either the state's security arm woud shift policy or they cede it to somebody else.
A couple of years ago i remember seeing a report about a community who had hired in private security to respond to incidents of anti-social behaviour and burglaries, because the police cold not be relied upon to arrive at the scene or take them seriously. This wa deeply worrying and signal, either the state's security arm woud shift policy or they cede it to somebody else.
On the plus side inflation is under control and unemployment is falling. There is plenty of leeway to roll out more quantitative easing if things get desperate.
Yet another U turn this time on petrol taxes. It's going to cost half a billion pounds. This is a third of the amount the govt said it was going to cost to change last month when they said they couldn’t and very definitely wouldn’t change the policy.
At eleven o'clock it couldn't be changed or there would be financial disaster by two it wasn't that important. Credibility leaking away.
Oh and watching Paxman tear Chloe Smith to shreds on newsnight was like one of those natural history shows where you can barely watch as the lion hauls the baby gazelle down and rips out it's throat.
At eleven o'clock it couldn't be changed or there would be financial disaster by two it wasn't that important. Credibility leaking away.
Oh and watching Paxman tear Chloe Smith to shreds on newsnight was like one of those natural history shows where you can barely watch as the lion hauls the baby gazelle down and rips out it's throat.
Really? Inflation under control? But the right was united on QE leading to inevitable inflation not so long ago...
We could do with inflation a fair bit higher right now.