Tax on wealth suggested

Alexland

zagfles said:

Because the govt don't really need it straight away with low borrowing costs, they can just wait and get more - as it's probably likely pensions will rise faster. As they tend to be invested in assets that produce better returns than gilts (ie govt borrowing costs)

This is a really good point which I often think is missed when people complain about the 'cost' to the tax payer of pension tax relief. The government is essentially stoozing the money by borrowing at a very low rate and then getting us to invest it for a long time via pensions in better return risk assets. So while we might be happy to pay a lower percentage of income tax on withdrawal the government are still pocketing the extra compound growth on the tax that is paid.

Mickey666

zagfles said:

Mickey666 said:

TBC15 said:

Just a thought.

There is a ton of money sitting in peoples pensions some of which will get handed over in the form of tax over the years.

Why not cough it up now to cover the deficit?

Probably needs a bit of fine tuning on the implementation side.

Not necessarily.  Pension pots fall outside of IHT rules and when inherited become totally tax-free.

Only for those who die under 75. If they die over 75 pension pots are taxable. Most people die over 75.

Fair point about the 75 age point, though it would be interesting to see figures to support your assertion that ‘most’ people dies over 75.  I know UK life expectancy is over 75 but that’s not necessarily the same as the average age of death.

MarkCarnage

Mickey666 said:

zagfles said:

Mickey666 said:

TBC15 said:

Just a thought.

There is a ton of money sitting in peoples pensions some of which will get handed over in the form of tax over the years.

Why not cough it up now to cover the deficit?

Probably needs a bit of fine tuning on the implementation side.

Not necessarily.  Pension pots fall outside of IHT rules and when inherited become totally tax-free.

Only for those who die under 75. If they die over 75 pension pots are taxable. Most people die over 75.

Fair point about the 75 age point, though it would be interesting to see figures to support your assertion that ‘most’ people dies over 75.  I know UK life expectancy is over 75 but that’s not necessarily the same as the average age of death.

Eh? Think you need to look at this....way over 75 for the mean, median and mode.....
https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/datasets/averageageatdeathbysexuk

Linton

MarkCarnage said:

Mickey666 said:

zagfles said:

Mickey666 said:

TBC15 said:

Just a thought.

There is a ton of money sitting in peoples pensions some of which will get handed over in the form of tax over the years.

Why not cough it up now to cover the deficit?

Probably needs a bit of fine tuning on the implementation side.

Not necessarily.  Pension pots fall outside of IHT rules and when inherited become totally tax-free.

Only for those who die under 75. If they die over 75 pension pots are taxable. Most people die over 75.

Fair point about the 75 age point, though it would be interesting to see figures to support your assertion that ‘most’ people dies over 75.  I know UK life expectancy is over 75 but that’s not necessarily the same as the average age of death.

Eh? Think you need to look at this....way over 75 for the mean, median and mode.....
https://www.ons.gov.uk/peoplepopulationandcommunity/healthandsocialcare/healthandlifeexpectancies/datasets/averageageatdeathbysexuk

Those figures are from birth so a small number of very young children dying will skew the mean.  Anyone old enough to read the data should be expecting an average age of death much closer to the median.

TBC15

Cracking set of statistics.

But for someone who is a bit thick when it comes to sums what’s the average age of death for those who may have made it to 55 and started a pension.

Edit looked it up on Google its 80.52

MarkCarnage

But for someone who is a bit thick when it comes to sums what’s the average age of death for those who may have made it to 55 and started a pension.

It's 80.52 for the average male in the UK at age 55. However, this doesn't take any account of those with serious health issues. For a healthy, fit, non smoking 55 year old it will be a fair bit more than that. Many big DB schemes run their own assumption set based very broadly on their own member demographics and experience and it comes in above 85.....

Averages can be dangerous things...

MarkCarnage

Those figures are from birth so a small number of very young children dying will skew the mean.  Anyone old enough to read the data should be expecting an average age of death much closer to the median.

Agreed...the point I was aiming to make was that mean, median and mode were all comfortably above 75. To expand on theoriginal poster's point, the median will give the point at which 50% of the population will die by and by definition a fraction below that will show that 'most' people will die above age, and that's 82.5 for males, and 85.7 for females. The mode shows the age at which the highest number of people die, and is higher still as would be expected in a society with very low infant mortality, and indeed a skew towards death at advanced ages. 

DireEmblem

Another_Saver said:

Replace council tax with a 1% land value tax would mechanically increase the take from ~£35bn to ~£50n

I rather like this - the current council tax scheme is broken on so many levels, or at least my view.

I remember when I rented a flat in a 'new build' on the outskirts of Edinburgh, the council banding was higher than people I knew who lived in the centre, and their flat was bigger!

barnstar2077

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

thegentleway

barnstar2077 said:

A percentage tax on anything over a million etc would just make wealthy people less likely to want to live in the UK, then you get no money from them.  If I ruled the world, I would find a way to stealth tax luxury items instead.  Champagne, expensive clothing, cars that cost more than 40k etc.  I would think of a novel way for each type of product so no one could point to one individual tax or tariff.  Yes, wealthy people would still know it was slightly more expensive to live in the UK, but from a psychological point of view I think it would be more effective. 

I think that’s a myth. There’s plenty of evidence that tax doesn’t make rich people leave:

https://www.forbes.com/sites/patrickwwatson/2018/05/10/high-taxes-dont-make-rich-people-move/?sh=2bcd4ec525e3
they find loopholes and pay a lot less but they don’t leave in droves.