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Increased taxation for the older generation?
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Tim D
Posted: 09 December 2021 08:30:36(UTC)
#485

Joined: 07/06/2017(UTC)
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Resolution Foundation making the case for imposing CGT on the "unequal, unearned and untaxed" gains on primary residences:
https://www.resolutionfo...blications/home-county/
https://www.resolutionfo...l-unearned-and-untaxed/

"The thinktank admitted it would be a hard sell" - https://www.theguardian....prices-capital-gains-tax
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Keith Cobby on 09/12/2021(UTC), Newbie on 09/12/2021(UTC)
Keith Cobby
Posted: 09 December 2021 08:49:03(UTC)
#490

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This old chestnut being given another outing, but it would introduce too much friction into the housing market. What they really want is CGT on PPR and an annual land tax. None of these proposals have any chance of success as they would be construed as a wealth tax. In any case we already have a wealth tax set at a low level (IHT). The problem with all these types of taxation are that to raise significant (worthwhile) amounts they would sit most heavily on those in the middle. Non runner!
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4 users thanked Keith Cobby for this post.
Tim D on 09/12/2021(UTC), Newbie on 09/12/2021(UTC), ANDREW FOSTER on 09/12/2021(UTC), Jeff Liddiard on 09/12/2021(UTC)
Newbie
Posted: 09 December 2021 09:24:16(UTC)
#486

Joined: 31/01/2012(UTC)
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Tim D;198550 wrote:
Resolution Foundation making the case for imposing CGT on the "unequal, unearned and untaxed" gains on primary residences:
https://www.resolutionfo...blications/home-county/
https://www.resolutionfo...l-unearned-and-untaxed/

"The thinktank admitted it would be a hard sell" - https://www.theguardian....prices-capital-gains-tax

Why is it that we forget to recognise that many average people have not gained by any kind of manipulation as per se, but through sheer diligence and effort. Imagine buying a house with a 25 year mortgage, and then living through times with interest rates at 14% and inflation running riots. Anyone with a property surely had to make cuts to expenditure and hold on for dear life and protect the castle for, the UK over the centuries has always promoted the idea of home ownership.

On a similar note, if an individual gives up their steady income paying job and ventures into the world of business and struggles 18 hours a day and makes it successful, and becomes a billionaire, should they be punished for it ! Similarly if an individual chooses to go to university for a mickey mouse course and racks up £50k worth of debt with no prospect of employment, how is this the fault of the wealthy.
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ANDREW FOSTER on 09/12/2021(UTC), Dexi on 09/12/2021(UTC)
Ad B
Posted: 09 December 2021 10:17:35(UTC)
#488

Joined: 20/04/2020(UTC)
Posts: 375
Newbie;198564 wrote:
Tim D;198550 wrote:
Resolution Foundation making the case for imposing CGT on the "unequal, unearned and untaxed" gains on primary residences:
https://www.resolutionfo...blications/home-county/
https://www.resolutionfo...l-unearned-and-untaxed/

"The thinktank admitted it would be a hard sell" - https://www.theguardian....prices-capital-gains-tax

Why is it that we forget to recognise that many average people have not gained by any kind of manipulation as per se, but through sheer diligence and effort. Imagine buying a house with a 25 year mortgage, and then living through times with interest rates at 14% and inflation running riots. Anyone with a property surely had to make cuts to expenditure and hold on for dear life and protect the castle for, the UK over the centuries has always promoted the idea of home ownership.

On a similar note, if an individual gives up their steady income paying job and ventures into the world of business and struggles 18 hours a day and makes it successful, and becomes a billionaire, should they be punished for it ! Similarly if an individual chooses to go to university for a mickey mouse course and racks up £50k worth of debt with no prospect of employment, how is this the fault of the wealthy.


Why is it that we forget to recognize that many average people have not gained at all. Since they have to live through times where they simply cannot earn enough over and above the cost of living and renting in order to save for a deposit. They work fulltime, but are in a low wage industry that means they just can't quite meet the affordability assessment that is required for a mortgage.

You have no idea, newbie, no idea at all...
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Ad B
Posted: 09 December 2021 10:19:36(UTC)
#491

Joined: 20/04/2020(UTC)
Posts: 375
Keith Cobby;198555 wrote:
This old chestnut being given another outing, but it would introduce too much friction into the housing market. What they really want is CGT on PPR and an annual land tax. None of these proposals have any chance of success as they would be construed as a wealth tax. In any case we already have a wealth tax set at a low level (IHT). The problem with all these types of taxation are that to raise significant (worthwhile) amounts they would sit most heavily on those in the middle. Non runner!


What friction would that be? The report didn't outline an annual wealth tax, but a delayed adjustment/charge upon home ownership exit or death.
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Keith Cobby
Posted: 09 December 2021 11:04:28(UTC)
#492

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Any event which would crystallize a CGT charge on a property sale would add friction to the housing market. Same with a land tax, it wouldn't matter when the tax fell due, and if it wasn't immediately payable, HMRC would want interest to compound on it. Freehold property should be just that, unencumbered. It's obvious why house prices have risen so far, artificially low interest rates over the last two decades, and a lack of supply. The overall tax burden is increasing and the IHT allowance (death wealth tax) has been flat for many years, government need to look at expenditure before increasing taxes further. Good column by Roger Bootle in the Telegraph this week about how we can learn from Singapore.
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Jeff Liddiard on 09/12/2021(UTC), NoMoreKickingCans on 28/12/2021(UTC)
Ad B
Posted: 09 December 2021 11:15:50(UTC)
#493

Joined: 20/04/2020(UTC)
Posts: 375
@ Keith, I agree that house price increases are, in the main, a function of artificially low interest rates.

But you still haven't pointed out where the friction would arise? Friction, I'm assuming of course, to mean anything that would prevent the wheels of the housing market turning? Buying and selling et al. Unless you mean something different?

If you look at the total number of transactions in the housing market per annum these last 10 years, they total alot less than in prior generations. So you could reasonably argue that today's market is alot more 'gummed up' than in comparison to 'normal times'. In which case, introducing a delayed/postponed CGT charge would only help to oil the wheels (likely by reducing the cost of housing across the board) bringing more participants into the market.
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Robert D
Posted: 09 December 2021 11:21:21(UTC)
#487

Joined: 06/11/2016(UTC)
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Newbie;198564 wrote:

On a similar note, if an individual gives up their steady income paying job and ventures into the world of business and struggles 18 hours a day and makes it successful, and becomes a billionaire, should they be punished for it ! Similarly if an individual chooses to go to university for a mickey mouse course and racks up £50k worth of debt with no prospect of employment, how is this the fault of the wealthy.


Then there's the individual who has become extremely wealthy (at least on paper) just by living in the right area and doing absolutely nothing at all, ie all they had to do was stare at the wallpaper for 30 years and become a property multi-millionaire. Shouldn't they be taxed accordingly?

Billionaires aren't being "punished" by being asked to pay a progressive tax rate. And with the help of clever accountants and offshore havens, the notion that these people actually pay the higher rate of tax is fanciful anyway. The UK is the money laundering centre of the world.


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Ad B on 09/12/2021(UTC), Tim D on 09/12/2021(UTC), lenahan on 10/12/2021(UTC)
Ad B
Posted: 09 December 2021 11:24:56(UTC)
#494

Joined: 20/04/2020(UTC)
Posts: 375
And far more fundamentally, why should a whole generation (or 2, 3 and perhaps 4) profit to the extent like no other asset class has and expect (or demand) a right to have it untaxed?

It's not the government that is at fault for pursuing policies that entrench inequality, but the folk who vote them in.
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New Simon T
Posted: 09 December 2021 11:34:00(UTC)
#495

Joined: 19/07/2018(UTC)
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Next year I am moving to a country with not only wealth taxation but CGT on house sales

The wealth tax is charged on worldwide assets (household contents are excepted excluding art and jewellery).

There is a tax free allowance of 700k EUR and there is a progressive tax rate from 0.2% to 2.5% (over 10m EUR)

The main home allowance is 300k EUR (you can deduct the mortgage)

The good thing is a couple can combine allowances so 1.4m EUR as the base allowance and 600k additionally for the house

Unfortunately as of a few months ago SIPPs are now not exempt from the wealth tax calculation

The CGT on the house sale is also interesting, it is 23% of any sale, however if you totally reinvest the money in another main property you don't pay anything however if you don't then you only pay the CGT on the difference in sale and repurchase price (ie if you were downsizing) - over 65’s there is no tax pay in this scenario (as long as you have lived in it for 3 years)

To be quite honest - I think these two are quite fair
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3 users thanked New Simon T for this post.
Ad B on 09/12/2021(UTC), Dexi on 09/12/2021(UTC), Tim D on 09/12/2021(UTC)
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