Things to look forward to in 2019?

[Bouleversee]

I am trying to finish reading today's Times and just reached page 40 in the Business section and an article headed 'Five ways' to raise £7bn from the rich (sic). Here's a link: https://www.thetimes.co.uk/article/five ... -6mhqnzbq9 but if it doesn't work you can google the heading and it should come up.

I imagine anyone who owns a decent home in the south of England and has lived long enough to pay off the mortgage and accumulate savings/isas sufficient to live on and finance old age care counts as wealthy and their estates are likely to miss out on the RNRB, and have to pay the higher probate fee and a large chunk of 40% IHT as things stand at present but I wonder how much wealth will be eroded before they die if the measures proposed by this think tank are introduced by a desperate Treasury. It makes it even more difficult to know how much one can afford to give away to needy heirs or charity. The thought of having to downsize again, having done so 10 years ago, is very daunting, especially with yet more stamp duty to pay, but scrapping ISAs could make additional taxes unaffordable. It's hard to get one's brain round all the implications and this is probably not the right place to discuss them but those who haven't read the article or a similar one in another paper might be interested to read about the proposals.

I must see what I can find out about the Resolution Foundation.

[Lootman]

For some reason, and not knowing much about it, I thought the Resolution Foundation was a right-wing entity. In any event it is led by a former Tory. But you would not know it reading this - it is a shameless propaganda piece for higher taxes and punitive redistribution.

I find it depressing and disturbing that there seems to be no political leader or influential entity that is advocating for lower taxes and some relief for those who shoulder the biggest tax burden for the benefit of others. The drive to punish success and reward failure seems stronger than ever. Where is our Reagan, Bush or Trump running on a platform of billions in tax cuts? Nowhere to be seen. The Tories cannot be trusted to cut taxes any more, whilst the rest are even worse.

And IHT is the worst of all the taxes, so to see prudent tax planning around IHT dismissed as "loopholes" is enough to drive me to exasperation. Or emigration.

Rant over, as I suspect this belongs on the Polite board.

[Dod101]

I actually do not care about IHT and in any case there are so many reliefs now that only the very wealthiest are likely to pay it. Re ISAs my reading of the article is that they are not advocating scrapping ISAs, only the lifetime ISA and the help to buy ISA. I have no idea what they are and they do not affect me.

I think additional bands of Council tax are a good idea. In the road next to mine are enormous houses where the plots cost around £1 million each before anything is built on them and yet they are a mere one band more than me. These houses are not even occupied very often.

Dod

[Bouleversee]

Dod -

Para 3 says "scrapped ISAs" so not clear that it is only the ones you mentioned. Some people don't have pensions, only ISAs (built up from taxed income), so would be badly affected if the ISA wrapper were removed from their savings pot.

I can't agree that only the very wealthiest will have to pay IHT.

[Steveam]

Here is the source document: https://www.resolutionfoundation.org/me ... -over-6bn/

There are many arguments regarding taxation and tax sources but this article is a fairly mild twist suggesting that by tightening a few allowances we can raise a little more from wealth rather than income.

Much clearer than the Times article.

Best wishes,

Steve

[Dod101]

Thanks for that Steveam. The ISAs mentioned in the source document are only 'Osborne's', that is the Lifetime ISA and the Help to Buy ISA. I genuinely do not know what they do but we know that 'Help to Buy' reforms seem to help housebuilders but whether they actually do much to help first time buyers I do not know.

I am one of those who finds the standard ISA extremely helpful and it would certainly affect me if they were scrapped, but that is not I think being proposed. What I do think they ought to do though is stop increasing the yearly allowance by more than inflation.

I am actually sympathetic to the idea of raising taxes, at least at the level of Councils because local services are currently being badly hit. Incidentally re my comment on Council Tax for enormous houses. I had forgotten that the Scottish Government had introduced a higher band so those expensive houses in my neighbouring road will be paying a bit more. At last, something I approve of from the SNP!

I have just paid HMRC a relatively modest sum raised from my dividend tax. Since about 70% of my dividends are tax free, I genuinely do not mind paying some tax on the remainder. Someone has to pay.

Dod

[Bouleversee]

Thanks for that Steveam. The ISAs mentioned in the source document are only 'Osborne's', that is the Lifetime ISA and the Help to Buy ISA. I genuinely do not know what they do but we know that 'Help to Buy' reforms seem to help housebuilders but whether they actually do much to help first time buyers I do not know.

I am one of those who finds the standard ISA extremely helpful and it would certainly affect me if they were scrapped, but that is not I think being proposed. What I do think they ought to do though is stop increasing the yearly allowance by more than inflation.

I am actually sympathetic to the idea of raising taxes, at least at the level of Councils because local services are currently being badly hit. Incidentally re my comment on Council Tax for enormous houses. I had forgotten that the Scottish Government had introduced a higher band so those expensive houses in my neighbouring road will be paying a bit more. At last, something I approve of from the SNP!

I have just paid HMRC a relatively modest sum raised from my dividend tax. Since about 70% of my dividends are tax free, I genuinely do not mind paying some tax on the remainder. Someone has to pay.

Dod

I agree with you, Dod, about income tax and the ISA allowance. I don't understand why the latter goes up so much more than inflation while the £3k gift allowance and the IHT exempt band are frozen. It has been £3k since I can remember and doesn't go far in terms of school fees now. If I prefer to contribute to school fees rather than have holidays why should that be potentially taxable over £3k? The govt. should be grateful they don't have to provide and pay for the education and that the children are playing sports and learning to play instruments and cook instead of getting fat and up to mischief.

[Lootman]

I am one of those who finds the standard ISA extremely helpful and it would certainly affect me if they were scrapped, but that is not I think being proposed. What I do think they ought to do though is stop increasing the yearly allowance by more than inflation.

That is happening anyway. The ISA allowance has not increased from 2017-18 to 2018-19 and I am not aware that it will increase for 2019-2020 either.

The ISA allowance was 6K a year about 20 years ago, so broadly speaking it has increased by about the rate of inflation, assuming prices have tripled in that period.

I'd expect it to stay at 20K for a few years now in any event. And as long as both spouses can contribute that amount, I think it is adequate. Remember that it benefits HMRC as well, as otherwise there might be millions more people declaring small amounts of dividends and capital gains, which would increase its workload for little payback.

[Dod101]

Thanks Lootman. Most of us probably have at least some holdings outside of a tax wrapper. I get well in excess of the dividend allowance from unprotected holdings and so do pay a modest amount to the taxman. It is all done online so I assume there is little or no human intervention. I am sure most of us, certainly retirees anyway could afford to pay more tax, and I would be sympathetic to that, although it does annoy me about the amount of tax collected and then wasted by any Government.

Dod