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SIPP Wealth Tax?
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torrence
Posts: 95 Forumite

A recent poll suggested a WT on anyone with net assets over £750,000, which allowing for property equity would hit many - but still the minority - of people. As most the electorate do not have net assets of £750,000 it would be an easy target for raising taxes if not soon then the next Labour government.
If you save into a SIPP whatever is in the SIPP an easy target for valuing based on assets. Whereas property or amounts in an ISA could at least be realised relatively quickly and gifted away to family e.g. as early inheritance, to reduce net assets.
I am reluctant to pay any more into my SIPP in this context. Any thoughts on whether non-pension investments would a better choice and more flexible if a WT were to be introduced in future?
If you save into a SIPP whatever is in the SIPP an easy target for valuing based on assets. Whereas property or amounts in an ISA could at least be realised relatively quickly and gifted away to family e.g. as early inheritance, to reduce net assets.
I am reluctant to pay any more into my SIPP in this context. Any thoughts on whether non-pension investments would a better choice and more flexible if a WT were to be introduced in future?
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Comments
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Corbyn got kicked out of position six months ago and the new-new Labour party aren't anywhere close to in power, so the likelihood of punitive wealth taxes occurring any point in the next decade are quite low.
On the other hand, removing tax benefits to higher rate tax payers for future contributions is a much more likely scenario, and in that case you'd want to front load contributions if you were a HRT.3 -
IMHO, just pay your taxes. Or in this case, imagine paying this imaginary tax. You will find that you're better off being wealthier and paying an imaginary tax than being less wealthy and not paying an imaginary tax.
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MaxiRobriguez said:Corbyn got kicked out of position six months ago and the new-new Labour party aren't anywhere close to in power, so the likelihood of punitive wealth taxes occurring any point in the next decade are quite low.
On the other hand, removing tax benefits to higher rate tax payers for future contributions is a much more likely scenario, and in that case you'd want to front load contributions if you were a HRT.0 -
torrence said:MaxiRobriguez said:Corbyn got kicked out of position six months ago and the new-new Labour party aren't anywhere close to in power, so the likelihood of punitive wealth taxes occurring any point in the next decade are quite low.
On the other hand, removing tax benefits to higher rate tax payers for future contributions is a much more likely scenario, and in that case you'd want to front load contributions if you were a HRT.
And although I said 75% is taxable, in practice it might be somewhat less than that because a proportion of it can be taken within the annual personal allowance. If you already have enough pension money between state and private pension to entirely use up your personal allowance from the day you stop working, then it's true that all the 75% would be taxable. As 25% is not taxable, and you would have got relief on 100% of it on the way in, it is still worth doing it.
In some scenarios the Lifetime ISA will be better than a SIPP pension for a basic rate taxpayer who is young enough to qualify for one, but if you're looking to dodge wealth taxes it is difficult to imagine that they would apply a wealth tax to the money accumulating in a pension which will eventually provide a retirement income and stop you being so dependent on the state in your old age , while not applying it to an ISA which can be accessed immediately.1 -
It could be that money in a pension would be safer from a wealth tax , as in fact you do not own it . It is held for you in trust by the Pension Trustees and is not even taken into account for inheritance tax.
Much easier to slap a tax on a mansion .
More likely for pensions is the ending of HRT as it costs Billions , although it might be simpler to reduce the AA instead as most basic rate taxpayers would not be hurt by this .
Salary sacrifice 'loophole' could also be in the firing line and maybe a freezing of the LTA , although not sure the latter would save much.
Seems very unlikely the 25% tax free lump sum would be changed.2 -
OK maybe I can still safely fund my SIPP. Let's hope it's not counted as "wealth" later on!0
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With the annual contribution limit unchanged and the LTA linked to CPI. The benefits are progressively being eroded without any need to create headline news. The media only ever comments on what is front of their noses.0
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A poll of who?
Prime Ministers / Chancellors / Party Leaders / MPs or just a random selection of people who have no influence over anything?1 -
Daily Mail readers
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torrence said:A recent poll suggested a WT on anyone with net assets over £750,000, which allowing for property equity would hit many - but still the minority - of people. As most the electorate do not have net assets of £750,000 it would be an easy target for raising taxes if not soon then the next Labour government.
If you save into a SIPP whatever is in the SIPP an easy target for valuing based on assets. Whereas property or amounts in an ISA could at least be realised relatively quickly and gifted away to family e.g. as early inheritance, to reduce net assets.
I am reluctant to pay any more into my SIPP in this context. Any thoughts on whether non-pension investments would a better choice and more flexible if a WT were to be introduced in future?0
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