Mortgage Rate Rises

[fez]

I expect to receive inheritance. And I fully support IHT as it's a huge wealth divider.
Pensions should be included as should it all.

Yep. Same here. I really hate the fact that most people are entirely self serving and always think they deserve something and other people should pay. If you have a lot of money then you probably haven't earned that over someone else who has worked hard their entire life and doesn't have a huge chunk of wealth. Did you earn the fact the house has appreciated massively in value? Did you earn the huge cost of taking care of you in later life that has dwarfed the amount of tax you paid over your lifetime.

The housing market is basically built on the idea that some people will get large chunks of money from their parents so they can afford our massively overpriced housing stock. Thats not a good thing.

 

[dirtychinchilla]

Yep. Same here. I really hate the fact that most people are entirely self serving and always think they deserve something and other people should pay. If you have a lot of money then you probably haven't earned that over someone else who has worked hard their entire life and doesn't have a huge chunk of wealth. Did you earn the fact the house has appreciated massively in value? Did you earn the huge cost of taking care of you in later life that has dwarfed the amount of tax you paid over your lifetime.

The housing market is basically built on the idea that some people will get large chunks of money from their parents so they can afford our massively overpriced housing stock. Thats not a good thing.

I don't believe that what you're saying is exclusively true. If I think of my parents, my father has put as much money as humanly possible into his pension. He sacrificed holidays, luxuries, whatever to ensure he has enough money in later life. Does someone else who hasn't bothered deserve a share in the money that he's sacrificed for? I'm no conservative, but I'm not sure he does.

With regards to property, I can agree with you on that.

 

[fez]

I don't believe that what you're saying is exclusively true. If I think of my parents, my father has put as much money as humanly possible into his pension. He sacrificed holidays, luxuries, whatever to ensure he has enough money in later life. Does someone else who hasn't bothered deserve a share in the money that he's sacrificed for? I'm no conservative, but I'm not sure he does.

With regards to property, I can agree with you on that.

How large is his pension pot? We shouldn't be going for people who have saved sensibly but neither should we allow people to pass on millions in wealth to people that are already likely massively privileged vs the average bear.

 

[dirtychinchilla]

How large is his pension pot? We shouldn't be going for people who have saved sensibly but neither should we allow people to pass on millions in wealth to people that are already likely massively privileged vs the average bear.

He's very sensibly planned to die with nothing, having paid for his care. I guess you could say he's calculated his burn rate (if you'll excuse the pun).

Sorry, that doesn't quite lead on from the topic of conversation. If he has saved and dies with money in the bank, on the basis of the above, I think it would be very strange for us to be penalised for it.

 

[EvilRob]

He's very sensibly planned to die with nothing, having paid for his care. I guess you could say he's calculated his burn rate (if you'll excuse the pun).

Sorry, that doesn't quite lead on from the topic of conversation. If he has saved and dies with money in the bank, on the basis of the above, I think it would be very strange for us to be penalised for it.

Hard to argue that IMO as he hasn't paid tax on his pension savings in the first place. If I was going to make an argument like that, I'd focus it more on non pension savings that have already been taxed.

 

[mattyfez]

Hard to argue that IMO as he hasn't paid tax on his pension savings in the first place. If I was going to make an argument like that, I'd focus it more on non pension savings that have already been taxed.

Gets messy quickly though... if they start taxing pensions 'too much' i.e. lower the 25% relief for lump sum withdrawal etc. people will simply put less into pensions and bung it into stocks and shares ISAs instead.

So then what? nerf the £20k ISA allowance too? then people will invest a lot less regardles of investment vehicle, so they have to hold cash savings which can't keep up with inflation...

There are a lot of knock on effects in the wider economy when private/retail investors dry up.

 

[dirtychinchilla]

Hard to argue that IMO as he hasn't paid tax on his pension savings in the first place. If I was going to make an argument like that, I'd focus it more on non pension savings that have already been taxed.

That's true. Frankly, I hadn't thought of that.

I feel deeply conflicted when it comes to tax. I can see the benefits of higher tax rates, but I can't say that I want to pay them, and I certainly don't want to pay tax on any inheritance my parents leave me. My dad is very savvy though - I'm sure he'll do what he can to minimise it.

 

[fez]

That's true. Frankly, I hadn't thought of that.

I feel deeply conflicted when it comes to tax. I can see the benefits of higher tax rates, but I can't say that I want to pay them, and I certainly don't want to pay tax on any inheritance my parents leave me. My dad is very savvy though - I'm sure he'll do what he can to minimise it.

The biggest issue with tax is people feeling like they are getting value for money. People will pay a very high rate if they feel its value for money. Part of it being value for money is obviously related to how much they have to spend after tax. Currently we are not getting value for money, things are constantly getting worse and taxes are constantly going up.

Unfortunately there is never a "fair" system for anything related to tax. Someone always loses out disproportionately when we are talking the middle/lower classes. The speculated changes to stamp duty are a good example of this. People are in massively different financial positions everywhere and quite often those positions are nothing to do with their prudence and hard work.

 

[200sols]

There are a lot of knock on effects in the wider economy when private/retail investors dry up.

Already happened in the UK, stock market has no liquidity companies cant raise capital here so they go elsewhere.. and lets face it the ISA allowance for stocks is pushed straight into the US market... mostly. So we give a huge tax break for people to invest in other countries. It makes no sense.

 

[matt100]

That's true. Frankly, I hadn't thought of that.

I feel deeply conflicted when it comes to tax. I can see the benefits of higher tax rates, but I can't say that I want to pay them, and I certainly don't want to pay tax on any inheritance my parents leave me. My dad is very savvy though - I'm sure he'll do what he can to minimise it.

The issue is the system is supported by the majority out of fear of their modest pots getting raided and this support empowers those with much greater wealth to hand it down and lock in privilege.

However since we're on this I'll tell you one tax that I hate.. stamp duty. The government screw with it whenever suits and you're taxing me on money I've already paid tax on? How on earth is that fair?

In my own example I agreed in 2020 pre COVID, completed as soon as you could after COVID, paid my stamp duty then a week later the government announced a holiday.

Meanwhile I'd already paid 40% on the stamp duty I paid.

 

[dirtychinchilla]

The issue is the system is supported by the majority out of fear of their modest pots getting raided and this support empowers those with much greater wealth to hand it down and lock in privilege.

However since we're on this I'll tell you one tax that I hate.. stamp duty. The government screw with it whenever suits and you're taxing me on money I've already paid tax on? How on earth is that fair?

In my own example I agreed in 2020 pre COVID, completed as soon as you could after COVID, paid my stamp duty then a week later the government announced a holiday.

Meanwhile I'd already paid 40% on the stamp duty I paid.

Fully agree with that. The stamp duty breaks were amazing.

 

[CaptainRAVE]

The issue is the system is supported by the majority out of fear of their modest pots getting raided and this support empowers those with much greater wealth to hand it down and lock in privilege.

However since we're on this I'll tell you one tax that I hate.. stamp duty. The government screw with it whenever suits and you're taxing me on money I've already paid tax on? How on earth is that fair?

In my own example I agreed in 2020 pre COVID, completed as soon as you could after COVID, paid my stamp duty then a week later the government announced a holiday.

Meanwhile I'd already paid 40% on the stamp duty I paid.

Taxed when you earn, taxed when you spend, taxes on what you don’t spend, taxed because you died. It’s only getting worse too. I’ll be giving all mine to charity rather than see this lot get another penny.

Mortgage is up next October, who knows what mess we’ll be in by then, the economy is looking more fragile than ever.

 

[EvilRob]

Already happened in the UK, stock market has no liquidity companies cant raise capital here so they go elsewhere.. and lets face it the ISA allowance for stocks is pushed straight into the US market... mostly. So we give a huge tax break for people to invest in other countries. It makes no sense.

If we had something like VCT scheme that wasn't so opaque and potentially risky/difficult to sell, I think that would help a lot.

 

[fez]

The issue is the system is supported by the majority out of fear of their modest pots getting raided and this support empowers those with much greater wealth to hand it down and lock in privilege.

However since we're on this I'll tell you one tax that I hate.. stamp duty. The government screw with it whenever suits and you're taxing me on money I've already paid tax on? How on earth is that fair?

In my own example I agreed in 2020 pre COVID, completed as soon as you could after COVID, paid my stamp duty then a week later the government announced a holiday.

Meanwhile I'd already paid 40% on the stamp duty I paid.

I mean, you pay tax on tax on tax. That how tax works. You are taxed on your income, you're taxed on any profit you make from investing that income (by and large) and you are taxed when you spend whatever you have left (VAT). Its not so much of an issue if all that money sloshes around inside the economy but it doesn't. Now, a huge part of it goes to multi-national companies who take a large chunk of it out of the country.

I'm just about to buy a house which is likely to cost me around £40k+ in stamp duty. I bought our current house 7 years ago and paid stamp duty on that. If we wanted to move again because our situation changed I would pay another stonking great sum for no reason. Its seriously one of the most backwards taxes that basically says "don't move house. Don't move when it makes sense, don't sell or downsize when it makes sense, stay where you are. Oh and hey, make sure you have picked the right house for the next 20 years because if you didn't, its gonna cost ya!".

 

[ci_newman]

The issue is the system is supported by the majority out of fear of their modest pots getting raided and this support empowers those with much greater wealth to hand it down and lock in privilege.

However since we're on this I'll tell you one tax that I hate.. stamp duty. The government screw with it whenever suits and you're taxing me on money I've already paid tax on? How on earth is that fair?

In my own example I agreed in 2020 pre COVID, completed as soon as you could after COVID, paid my stamp duty then a week later the government announced a holiday.

Meanwhile I'd already paid 40% on the stamp duty I paid.

Be careful what you wish for.

There are proposals to overhaul the stamp duty rules so that sellers pay a lifetime tax when selling a property and replace council tax with an annual property tax too.

Is stamp duty changing? Here's what we know so far | Property news

The government is considering replacing stamp duty with an annual property tax for homes over £500,000, paid by sellers rather than buyers

www.rightmove.co.uk

[Edit] Basically lowering the cost for first time buyers, but putting sellers on the hook for an additional annual property tax

 

[matt100]

Within reason I don't mind, I don't have an issue with tax, I have an issue with double tax

 

[mattyfez]

It's a bit of a chicken and egg situation.. If social housing and support were better, people wouldn't be so worried about funding thier retirement via private investment and passing it and houses to children etc. with a heavier IHT bill.

But it comes back to poor value for money with taxes.. Because of poorly run government and poorly run local authorities.

 

[jaybee]

Why in the proposals for stamp changes is there a cliff edge cut off of £500,000? So loads of the country won't pay anything, but if you live in the South East/London you get penalised AGAIN for having to buy higher priced houses? I might be being stupid here but that sounds unfair and like a school child thought it up? Why would it not be regionally aligned to average prices of an area?

 

[a1ex2001]

It's a bit of a chicken and egg situation.. If social housing and support were better, people wouldn't be so worried about funding thier retirement via private investment and passing it and houses to children etc. with a heavier IHT bill.

But it comes back to poor value for money with taxes.. Because of poorly run government and poorly run local authorities.

It seems incredibly common for people to blame our per performing public services on them being badly run and inefficient even though the UK's tax take is lower than countries with better public services like those in Scandinavia. It seems classically British to want the best services and low taxes when in reality having both isn't going to happen.

 

[200sols]

The problem with the proposal for a 'sellers tax' replacing stamp duty is it will still actively discourage downsizing. Stamp duty is a terrible tax but replacing it requires a lot of thought. However council tax is well overdue an overhaul and a new annual property tax paid for by the property owner rather than simply those living in the property is a welcome addition. However until we see details its all guessing.