You look at it the wrong way round. In a competitive market it costs “X” to hire someone all in. When you tinker with pension and costs it just offsets. For example back in the noughties I worked as a junior for a hedge fund and got zero pension, zero health package. But my base was about £20k higher than when I was in a bank that gave me a good pension and life insurance/private medical. Same with employers national insurance - put it up and take home salary will go down long term as everything works back to “X”.
What I found working in that world is that people spent what they earned. Certainly in junior roles. I found it amazing that people still living with their parents who were higher rate tax payers still had no money at the end of the month. Whilst I'm not one for state interference, mandated pension contributions on the whole is a sensible thing.
Yep I was definitely like that. Wasn’t living at home but definitely regret frittering away my extra cash and not having a pension in my twenties. I did sort out private medical but not having a pension was just dumb.
And conversely I was/am in the opposite position. The companies I worked for made it a condition of employment above a certain grade that you were enrolled in their pension scheme. As the basic tax rate was 33% at the time, I cursed the additional 5% taken for that pension. Now I’m very glad I had no say in the matter!
Isn't it a tax on people who don't live until pensionable age. Life is a lottery. None of us know how many spins of the wheel we're going to get. Why should someone be mandated to save for a future they may not have? (Slightly tongue-in-cheek).
Up until recently no if unspent as it was able to be passed on as a pension free of IHT. It was an investment into providing support for oneself or ones love ones in retirement. With the recent tax changes it's disincentivized and whilst there will be a short term tax gain, longer term public care costs will rocket because of it. Incredibly narrow thinking from Rachel from accounts.
They’ve already come for everyone else. At least this time they’ve gone for the waspi women - ****’em
She does seem a bit dim to be honest. Tax profits. Businesses don't mind paying a bit more tax on profits as long as they have the opportunity to make profits. Of course they will moan and gripe, but if you deny them the opportunity to make profit (Eers NI hike) then there is no point in investing. On the pension pot, I disagree to an extent; there is a big difference between making provision for your own retirement and using a loophole to shelter your wealth from IHT.
Surely if a husband pops his clogs and pension goes to funding wife’s retirement that is exempt in any case from IHT?
The problem with taxing profits is that business and their accountants are extremely adept at disguising profit.
Dim? I would say ill advised or not listening to advice as I don't exepct a chancellor to be able to understand every financial implication. The thing is she's made quick decisions based on ideology without listening to the people that can explain the consequences. Either that or she just doesn't give a **** about the consequences. We'll have to disagree on IHT. A tax on people who die unexpetedly on money they've alreeady been taxed on will never be fair. Yes, however if both die in a car crash leaving children they'll likely lose 40% of it. given the thresholds and house prices in the south east. Not really fair is it. Especially if 7 years before death the person can give everything away, live in poverty and there's no tax due. A pension should be able to be passed on free of IHT. Let's face it, the income from it will likely be taxable, it's used to determine how much the government can get away with not paying in care costs and they've made legislation to prevent people building up excessive ammounts purely as a tax avoidance measure. That and BPR relief is making UK investment less attractive, which in turn affects jobs. The government want to reduce their care expenditure but are making it less attractive for people to save for their own care.
And if their operation costs go up, either salaries stagnate or the cost to the public increases. Worst case business fcks off elsewhere where it's cheaper to operate and takes their jobs with them.
I'm not too fussed about the threat of the latter. Business leaders moan and groan about profits being squeezed, but unless they are eradicated entirely, they, or someone just like them will still operate. Businesses expect to be able to do all the things they do and to also make fat, fat profits. As soon as some of that is questioned they become shocked and offended.
Never a peep about fairness from “business leaders” when their profits get artificially pumped by foreign policy motivated sanctions and tariffs on their competitors - that is all down to their business genius and they deserve them. Or when they piggyback on the R&D of the intelligence agencies they essentially get given open sourced for free after it becomes internally obsolete. It was all us because it has our logo on, you see?
Lovely. I see that despite Sainsbury's making a cool £ Billion they are laying off thousands of people . We could all refuse to shop in Sainsbury's or we could all just say f**k 'em they've come for everyone else . Too many Turkeys vote for Christmas .
I am disgusted by Sainsbury's treatment of its staff and also don't have a great deal of sympathy for the Waspi women and their desire for special treatment, just because they failed to do their research. It's incredible how people can have different views on things that are totally unrelated isn't it?
By jove, Davy has said something I agree wholeheartedly with. You're dangerously close to working something out here but I'll take the brief respite from blaming middle class people who buy things like chickpeas and avocado for everything! Twin problems here, really. The first is that automation is cutting the workforce, but they can't really say that because it'll spook the horses. Secondly there's a relentless corporate need to deliver greater and greater shareholder value. So they'll blame the NI contributions – even though the whole idea of companies paying NI is to ensure a bit filters back to the ordinary folk.
Yep, despite the senior execs at Sainsbury’s already being on massive basic salaries with unbelievably ‘generous’ pension funding, their much-needed mahusive bonuses will be closely linked to increasing, or at the least, maintaining such huge profits. Government wants to raise money to invest in the welfare state, thereby reducing our profits by a couple of percentage points? We’ll just have to sack people much more needy than we can even contemplate and then blame the government! Simples! Can’t drop below the £1 billion level you know! Now, must go find a dairy farmer who I can screw over by forcing him to sell his milk to us at below cost. He must understand he’ll be better off selling at a 10% loss than having to dump all his milk and not get a penny. Tesco have got a ‘promotion’ on you know!
Why should adult children be handed a fat wedge of cash tax free? It's just a massive benefit for people receiving cash. They can get a job and earn their living like everyone else. And if they are lucky enough to inherit money (above the already generous thresholds) then a portion of tax in line with income tax is absolutely fair. But no, some greedy guts just want to ensure not a single penny is prised from their cold hands. Everyone dies. Some people die early. But if people have some money they want to shield legally and efficiently it's never too young to start thinking about how to do that – if it's a matter of such great importance to them there are loads of ways to leave money efficiently. Set up a trust, pass it on at a younger age as gifts. Loads of ways to do it if tax avoidance is your priority. The argument about money already being taxed is such a red herring. The money gets taxed when it changes hands. Otherwise you could argue that if you saved up money from post-tax earnings you shouldn't have to pay VAT or Stamp Duty. IHT tax isn't a case of the same person being taxed. The money is being taxed when it moves, therefore the RECIPIENTS are being taxed. As for pensions, looks like in almost all cases it's tax free or taxed as income rather than IHT. Rules are changing in 2027 though. https://www.gov.uk/tax-on-pension-death-benefits
Why? Why not? is you position based on jealousy? For me it's because it's money that has already been taxed (earnings) saved by people that want to support themselves rather than piss it up the wall and rely on the state. It's used to deny state support for care, if passed on it's taxed as income and anything left taxed when spent. It's an unfair tax on the prudent and unfortunate. I presume that any money you have left at the end of the month you're happy for the government to take back? Same principle. Why should someone that if rich or prepared enough, get away with paying no tax, when the middle who might die early unexpectedly get shafted? There's possibly an argument for IHT if trusts gifts and other avoidance measures are cancelled. How someone can argue that it's fair for someone to give their money away 7 years before death can pay nothing yet someone who gets run over by a bus unexpectedly pays a large perecentage I don't understand. It really isn't, or course in my opinion. You don't get taxed on a percentage of your savings, you get taxed on a percentage of the interest/income from those savings/investments and the tax is taken before the money moves. It's the estate or the dead person that gets taxed not the recipient. The government take their slice before probate is granted and the executors can divvy what's left up. What you're advocating is treating inheritance along with recipients income, which is a marginally more sensible idea. At least it's based on an ability to pay rather than a sometimes arbitrary valuation of assets that may not even be liquid. QUOTE="EnjoytheGame, post: 3400442, member: 3339"] As for pensions, looks like in almost all cases it's tax free or taxed as income rather than IHT. Rules are changing in 2027 though. https://www.gov.uk/tax-on-pension-death-benefits[/QUOTE] It's right to close the loophole for tax free inheritance of pensions - if IHT is a concept is correct. But you also need to cancel the rest of the relief on BPR and outlaw trusts and gifting. You need to be consistent and apply the rules fairly. When some can avoid and others, through no fault of their own can't, the system is wrong.
It's certainly not jealousy, but with that comment you've played the man, not the ball. I could just as easily retort that it's greed to expect every single penny when someone dies rather than the perfectly reasonable idea that *some* of it should be subject to tax. I explained why the idea that the money is taxed 'twice' is a total red herring but you've gone back to that argument again! Comparing interest on savings to inheritance is not like for like. That's YOUR money. This is money passing from a dead person to their intended recipients. The money is moving! Your other example that I think money should be handed back to the Government at the end of the month is preposterous. I didn't say that, or suggest anything like that. It's common that money is taxed when it moves. Inheritance is a movement of money. The dead person isn't being taxed. They are dead. The recipient is being taxed on money they didn't own or earn. There's nothing strange about that. If someone wants to avoid the tax they can. It requires planning and knowledge but it can be done. When the sad day comes, I may well inherit pretty well and I won't resent having to pay some tax on a windfall that I didn't generate, or contribute to building, or own. I believe in at least maintaining the pretence that our society and economy is a meritocracy rather than thinking: "mine, mine, mine." We fundamentally disagree on this point so perhaps no point going round in circles but I just don't see any justifiable reason why inheritance should be entirely tax free. It's taxed pretty lightly as it is but, typically, some people want more, more, more.
I understand what you are saying but the recipient hasn't had that inherited income taxed previously. That is the nature of tax and money. Money is not taxed once. It's taxed at each transaction as it's passed from one entity/person to another. When you buy something you pay tax on it in the form of VAT. That doesn't mean the shop owner can avoid tax on their profits/income because the money has "already been taxed". Equally an employee can't avoid tax because the money in their wages has "already been taxed". Same for shareholders and dividends. Every other income somebody gets is liable to tax so I don't think IHT should be any different even if tax has been paid on the money by someone, or something, else in it's history. Indeed IHT has far more allowances and exemptions than most other taxes and is quite generous from that point of view.
So if someone bought a house for £40,000 but upon their death several decades later it’s now worth £400,000, how have they paid tax on that?
A house isn't a liquid asset. It rises in value along with other houses due to poor government policy. You can't sell it, pocket the profit and then buy a replacement for 40k. Replacements also rise in price. Not to mention upkeep stamp duty council tax etc etc. If nothing else the main family residence should definitely be free of IHT. 2nd houses, fair game imho.
This is of course assuming that there is never a crash in the housing market. The next crash will be mahoosive but I am unsure if this crash will be tax deductible.
When people inherit a house 90% of the time they are already living elsewhere. The house then gets sold for cash. Why should that be free of tax? If you inherit a huge stock portfolio that's risen 10x, you could make they same argument that if you buy another stock portfolio it's expensive too. For almost the entirety of civilization, there has been a rich asset owning class that ones the land/bussinesses/factories and the peasants who work in it. It's only since ww2 that this has changed, because we had a tax system that didnt just allow wealth to accumulate throughout lives and then onto the next generation. Inheritance tax is the biggest tool to stop us going back to feudalism, and to me is the faireay tax of them all. Why should the people grafting and working to keep society going have to pay to run public services but not people who just inherited it?
This makes no sense. When you,and then your spouse die, you don't need to buy another house. If it's not taxed by inheritance tax, then, not being anybody's principle residence, it should be subject to CGT, no?
No. Why do children who may or may not still be living there have to sell the family home? Why do people that save up over their lives and buy a home get penalised when others on the same salary that decide to spend it on holidays instead pay nothing? Tax on investment propoerty is fair enough. Tax on your main family residence is unfair in my opinion. We could add a has to be owned for 7 plus years type proviso maybe, but the gifting rule pretty much makes IHT unworkable and unfair. All it does is allow those with the means or planning ability to avoid.