Tax on wealth suggested

Coveredinbees!!!!

Over £1M phew I'm safe.

Albermarle

There's been enough pain this year without further tax rises . Just stick it all on the national debt and forget it. Saving £100bn won't exactly pay it off. Slowly things will recover.

The problem with this is we do not know when the next disaster will strike . When it does better to have the debt at more manageable levels before we have to start borrowing more tens of billions. 

Thrugelmir

itwasntme001 said:

I think it is safe to say, given the type of people who frequent these forums, that we all have had our wealth increase this year.  Personally this year has been absolutely fantastic wealth wise since I own a lot of stocks, much of it in growth funds.

Will the growth continue to materialise though.  Or is much already priced in. 

The_Green_Hornet

Albermarle said:

There's been enough pain this year without further tax rises . Just stick it all on the national debt and forget it. Saving £100bn won't exactly pay it off. Slowly things will recover.

The problem with this is we do not know when the next disaster will strike . When it does better to have the debt at more manageable levels before we have to start borrowing more tens of billions. 

Debt interest, as a percentage of GDP, is the lowest it has been for decades so I would say it is currently at a very manageable level.


https://commonslibrary.parliament.uk/research-briefings/sn05745/

gozaimasu

Wealth tax has been talked about long before that BBC article.

https://www.ifs.org.uk/events/1830

I like the IFS videos that explain a lot in a simple way about where the government gets money from and how we all pay those taxes. That one I've linked is from 2017, so somewhat out of date, but the government generates 700bn per year, with 40% of that from income tax and national insurance. The top 10% of income tax payers (people on £50k+ p.a.) pay 60% of all income tax and the top 1% (those earning £150k+) pay 25% of all income tax. That leaves 15% paid by everyone else earning less than £50k and of course the 40% of all people who don't pay any income tax at all.

I would like to know if this suggestion of 1% on everything over £1million now makes Premium Bond prizes of £1m taxable. They might not be taxed at source, but as soon as they make that person have £1million they will be due to pay tax on that so for the first year they'd be £10k down. If they have any other assets then that's another £10k down the following year. Essentially it would cost you £10k per year just to have a million+ pounds. The idea of being able to live off that £1m win for the rest of your life would be shattered.

Sorcerer2018

Another impact of this wealth tax, will be a larger number of the UK rich will leave the UK claim residents somewhere else, and take their money and business with them. The UK will rise less money than they think, and as a bonus loads of people will lose their jobs. All when the economy is down the pan, and unemployment is rising. As France discovered a few years ago, taxing the rich doesn't work, they just leave to live in another EU country.

LHW99

gozaimasu said:

The top 10% of income tax payers (people on £50k+ p.a.) pay 60% of all income tax and the top 1% (those earning £150k+) pay 25% of all income tax. That leaves 15% paid by everyone else earning less than £50k and of course the 40% of all people who don't pay any income tax at all.

I think the calculation here is out - the "top 10%" will include the "top 1%" so its 40% of the income tax paid by everyone else earning less than £50k (and above the tax-free allowance). That presumably would be 50% of the country? (100% - (10% top earners) - (40% non-tax payers).

eskbanker

gozaimasu said:

I would like to know if this suggestion of 1% on everything over £1million now makes Premium Bond prizes of £1m taxable. They might not be taxed at source, but as soon as they make that person have £1million they will be due to pay tax on that so for the first year they'd be £10k down. If they have any other assets then that's another £10k down the following year. Essentially it would cost you £10k per year just to have a million+ pounds. The idea of being able to live off that £1m win for the rest of your life would be shattered.

No, the idea is that it's only wealth above the threshold that's taxable, not the initial £1m itself:

This would be paid by individuals whose total wealth after mortgages and other debts, and after splitting the value of shared assets such as a jointly-owned family home, exceeded the tax threshold, and only on the value of wealth above that threshold. To be clear, a wealth tax levied at 1% above £500,000 would require a couple to have net wealth of more than £1 million before any wealth tax would be payable.

Sea_Shell

eskbanker said:

gozaimasu said:

I would like to know if this suggestion of 1% on everything over £1million now makes Premium Bond prizes of £1m taxable. They might not be taxed at source, but as soon as they make that person have £1million they will be due to pay tax on that so for the first year they'd be £10k down. If they have any other assets then that's another £10k down the following year. Essentially it would cost you £10k per year just to have a million+ pounds. The idea of being able to live off that £1m win for the rest of your life would be shattered.

No, the idea is that it's only wealth above the threshold that's taxable, not the initial £1m itself:

This would be paid by individuals whose total wealth after mortgages and other debts, and after splitting the value of shared assets such as a jointly-owned family home, exceeded the tax threshold, and only on the value of wealth above that threshold. To be clear, a wealth tax levied at 1% above £500,000 would require a couple to have net wealth of more than £1 million before any wealth tax would be payable.

But if you already have a significant level of wealth, a big win could push you well into taxable territory.

You could end up taxed on some, if not all, of that "tax free" win!!

Albermarle

I would like to know if this suggestion of 1% on everything over £1million now makes Premium Bond prizes of £1m taxable

As the chance of winning a Million Pounds is so small, I am not sure this is something likely to worry anybody.