Future UK slums

GreatApe

economic wrote: »

arent these areas supposed to be gentrifying hence the price rises?

yes those flats you see with the broken windows are about £300k for a 2 bed and £400k for a 3 bed.

The more interesting question is why did it go from a ghetto in the 1990s where you could buy a flat for £5-10k and now its £300-£400k some 25 years later. I think one of the reasons is that the occupancy rate of said estates has gone down towards 2 persons per property from maybe 4-5 persons. Many of those that are left are now the old folk who can no longer cause as much trouble as they could when they were kids. CCTV probably also helps plus the general trend towards lower and lower crime over the last few decades

GreatApe

slums need lots of children I cant even imagine a slum that is just pensioners and middle age.

I think future slums to be slums would need lots of children and since the natives working class are having fewer and fewer children per women its probably not going to be easy to form future slums. The local London plan also required mixed developments so its not like the old estates where it was 100% social/poor renters who didn't even pay their own rent or have a deposit to lose.

economic

i was discussing with my parents today about finances. they are retiring soon. we are worried about inheritance taxes and what to do with the cash they have.

with stocks high and property high where would be good places to put the money? they are gifting £150k each to myself and my sibling but will still have a fair bit of cash left.

GreatApe

economic wrote: »

i was discussing with my parents today about finances. they are retiring soon. we are worried about inheritance taxes and what to do with the cash they have.

with stocks high and property high where would be good places to put the money? they are gifting £150k each to myself and my sibling but will still have a fair bit of cash left.

I am a similar age to yourself and my parents are considering these topics too

The only bit of advise I can give is the ChuckNorris school of thought which says why risk it on black if you already have enough chips to live the life you want.

Other than that I would say learn the rules before you need them. For example I think you can put almost any amount into a pension even £1,000,000 in one go you of course wont get tax relief on that above your earned income however afaik pensions pass on outside the estate so for insistence if someone had £1m in a bank account and found out they were going to die in a few months time they could put that into a pension and get it out of their estate asap. The pension would be tax free if the person dies under 75 and marginal rate of tax if they are over that age so in theory this act could save £400,000 in tax for someone aged under 75 who sheltered £1m this way a few weeks before they passed. Or at least that is my understand of it.

economic

GreatApe wrote: »

I am a similar age to yourself and my parents are considering these topics too

The only bit of advise I can give is the ChuckNorris school of thought which says why risk it on black if you already have enough chips to live the life you want.

Other than that I would say learn the rules before you need them. For example I think you can put almost any amount into a pension even £1,000,000 in one go you of course wont get tax relief on that above your earned income however afaik pensions pass on outside the estate so for insistence if someone had £1m in a bank account and found out they were going to die in a few months time they could put that into a pension and get it out of their estate asap. The pension would be tax free if the person dies under 75 and marginal rate of tax if they are over that age so in theory this act could save £400,000 in tax for someone aged under 75 who sheltered £1m this way a few weeks before they passed. Or at least that is my understand of it.

we were thinking more in line of a rental property in london. mortagage would be small and the income plus other income would more then offset their living expenses.

its a nice problem to have but its a problem nontheless

wotsthat

GreatApe wrote: »

Other than that I would say learn the rules before you need them. For example I think you can put almost any amount into a pension even £1,000,000 in one go you of course wont get tax relief on that above your earned income however afaik pensions pass on outside the estate so for insistence if someone had £1m in a bank account and found out they were going to die in a few months time they could put that into a pension and get it out of their estate asap. The pension would be tax free if the person dies under 75 and marginal rate of tax if they are over that age so in theory this act could save £400,000 in tax for someone aged under 75 who sheltered £1m this way a few weeks before they passed. Or at least that is my understand of it.

Wait until you get 6 months notice of death before trying to avoid IHT? Sounds quite stressful having a massive IHT liability and hoping the Grim Reaper sends a formal notice of closure. Also, if they managed to live just a few months or even years longer they could quite easily regret that decision as the tax charge for exceeding the annual allowance bites.

Start giving it away early and every year you live start totting up how much tax you save by being generous. The best way to avoid IHT is to have less money.

GreatApe wrote: »

The only bit of advise I can give is the ChuckNorris school of thought which says why risk it on black if you already have enough chips to live the life you want.

Nothing is risk free though. If I'd got a spare £1m that I didn't need and people I'd like to give it to I'd get on with it because the longer I delay the higher the risk of it going to the taxman.

economic

agree with wotsthat. also if someone has months to live chances are they may not be in the right state of mind to sign anything or make any decisions. very risky what GreatApe has suggested.

GreatApe

economic wrote: »

agree with wotsthat. also if someone has months to live chances are they may not be in the right state of mind to sign anything or make any decisions. very risky what GreatApe has suggested.

I didn't suggest it as a strategy to plan for and do but rather a possible way to avoid/Limit IHT in the event that you find death is unexpectedly near. and I think I made it clear that I was no expert in the matter I only pointed to a possible way to shelter some money from IHT in the event something like this happened with the added bit again that I am no expert and people should do their own research.

Nothing is risk free though. If I'd got a spare £1m that I didn't need and people I'd like to give it to I'd get on with it because the longer I delay the higher the risk of it going to the taxman.

Good points especially about the annual allowance tax charges which might/will limit this to a few tens of k

As you say I suppose the best thing is to get under the £1m limit before you get close to the end

lisyloo

you can put almost any amount into a pension even £1,000,000 in one go

If it does over the LTA then don't you pay extra tax on it though?

GreatApe

lisyloo wrote: »

If it does over the LTA then don't you pay extra tax on it though?

Im a novice but the government website says

The rate of tax you pay on pension savings above your lifetime allowance depends on how the money is paid to you - the rate is:

55% if you get it as a lump sum
25% if you get it any other way, for example pension payments or cash withdrawals


If I am not mistaken a person could pay in this years and the last 3 years wages and get tax relief on the lot. So if someone earns £40k a year and made no pension payments then they would get £160k limit they can put in this year and get tax rebase on them? So for instance I wonder if this would work. Lets pretend a persons mother or farther got the bad news they are about to die in a few months time. Could the child lend said parent £100k (or the parent could put in £100k of their own money), who would then put £100k into the pension pot getting tax relif on that at 20% so its worth £125k. On death the estate is worth £100k less as £100k is in the pension so 40% less IHT on that £100k plus £25k gained via pension tax rebate/relief to make £65k saved tax? £65k is not word changing but if its a few days of paperwork it would be worth it. Again just the speculations of a novice

What I dont quite understand is the tax on the amount you put in above the £40k annual limit. I think its to stop giving a tax rebate to people who put in more than £40k of earnings so the tax just claws back the rebate but what if you are not putting in earnings but savings. Anyway Im not close enough to this problem to have or to invest the time to be clearer on these topics.