For the programme, John Whiting, a tax partner at Price Waterhouse Coopers, has valued Peggy Mitchell’s flat at around £280,000, but with her jewelry and other assets, her sons could be faced with a tax bill on her death. John Whiting says: “Let’s not forget the pub – it is hers: she owns it – that’s probably got quite a good value. So, of course, if you put that and all her jewelry in, her estate in principle is well above the threshold. “We’ve just got to watch it, she’s just teetering in to the Inheritance Tax net so, of course, she’s the classic sort of person who just needs to keep an eye on it and, perhaps, just needs to think about it a bit.”
Economic Secretary to the Treasure Ed Balls tells the programme that only the wealthiest pay IHT. He says that if it was abolished and replaced by another tax such as a tax on petrol, it could mean 18p on a litre. If it wasn’t replaced with other taxes, it would mean a cut of £3bn from schools and hospitals around the country.
What an idiot. And to think, this is the man Gordon Brown intends to make Chancellor of the Exchequer.
As Tarzan once famously said "it's all balls"
ReplyDeleteBut don't laugh too soon-Steve & dave will follow the Labour lead.
i)
ReplyDeletea) Average asset-base of the UK: £100,000 pc (£6tn/60m people)
b) Asset base of Peggy Mitchell: £250,000+. What percentile of asset-base is she in, Iain?
It might be hitting 'ordinary' people in Tunbridge Wells, but 'ordinary people in Tunbridge Wells' are not the same as 'ordinary people'.
Moreover, IHT is mostly hitting unearned income form the housing market.
ii) It raises £3bn a year. That is the equivalent of 18p on petrol.
How *exactly* is Ed Balls wrong, Iain?
Nah.
ReplyDeleteIt'll go on the TV licence fee.
Ed Balls. Plonker.
You know, with that lot spending £800 million on public sector job advertising, you'd think that they'd be able to attract someone with some ability, wouldn't you? I blame the rotten education they're getting these days.
'jewelry' ?
ReplyDeleteAnd let's be honest a 'tax partner' is hardly likely to have an independent view on this - signing people up for tax avoidance schemes is their bread and butter.
If people had to start from zero in life instead of being bailed out by a trust fund or rich parents how much better life would be.
The wealth most people are handing on is in proerty. This wealth is the parable of the talents in reverse. By doing nothing and adding nothing you acquire disproportionate wealth. It rewards those who risk less. It is therefore fair game for taxation.
ReplyDeleteTo people who say inheitance tax is a huge issue I say they must have problems with their sense of priorities. There must by 500 issues more important. In fact I can't think of a policy issue less important.It shows we have lost touch with the reality of most people lives infavour of helping an already affluent minority. Excessive inherited wealth blocks social mobility.
If Gordon wants my money - better he has it when I'm dead. The £250k you can pass on tax free is more than enough. The tax I will pay will go to the pot that pays for the NHS - of which my family is a heavy user.
Brown will definitely pick the biggest idiot he can find. He's got to find someone dumb enough to make it look as if he knew what he was doing these last ten years.
ReplyDeleteThe only reason Blair kept Brown on so long was because he knew where all the bodies were buried, on the one hand, and he was obviously never going to acquire much in the way of popularity, on the other.
Now on the strength of the rigged 2005 general election, where 4 million postal votes magically turned up from somewhere, Brown's got himself into an unassailable position.
We should call this 'the Gordon principle', whereby every political leader tries to surround himself with lesser people who cannot threaten their position. The longer a regime lasts, the lesser and lower in ability the idiots become.
How apt that the most likely Brown successor is actually called Balls. Really he should have been called Brown - from where his nose has been all this time, and Gordon too would have been most perfectly named, had they swapped.
How apt is the name Balls. This is the Gordon Principle at work, whereby insecure politicans appoint someone of lesser ability than themselves to succeed them. In Brown's case, actually finding anyone dumber than himself must have provided a major challenge.
ReplyDeleteReally the names are the wrong way round, given where Balls has kept his nose for so many years, and taking into account Gordon's single handed destruction of Britain's once virtuous and competitive economy.
I've never understood why Brown rates Ed Balls. I'm sure he is very bright but he far too inarticulate to be effective. He's even less charismatic than Brown!
ReplyDeleteRemove one's home from IHT and it wouldn't be quite so unfair.
ReplyDeleteI don't believe the 18p on petrol scenario.. does he?
Do you really think he'll be the next Exchequer?
The inheritance that is at risk of taxation is mainly property. This is the parable of the talents in reverse - people are receiving disproportionately high reward for investing by the most risk averse way.
ReplyDeleteTo those who argue that this is an important issue I say that you have clearly lost your sense of priorities about the world we live in. I cannot think of a less important issue than helping people who are dead keep their money in excess of £250k
The new landed classes are the broad middle classes - and inherited property wealth now does on large scale what the aristocracy used to do on a small scale - block social mobility. We cease to be a the meritocracy we should be.
I'd rather Gordon takes my money for the pot that pays for the NHS when I'm dead. I will be paying up after the time I have probably been the heaviest consumer of its services - better than BUPA
Ed Balls, he is married to that NuLabor twat Yvette Cooper who poses as our local MP. More interested in solar panels om people's roofs than human rights.
ReplyDeleteTypical NuLabor priorities!
After the Dave and Liam's thoughtful "Hey, count us in" response to Blair's proposal to foist more obscenely destructive WMDs on us, I fear anonymous 3:44 may well be right.
ReplyDeleteI had so hoped the Conservatives would display some independence of mind, but apart from the general weakness of their political responsivenesss, after Trident, their handling of the East Lothian issue and erosion of democracy in the UK more generally, as well as their appalling Scottish incarnation I fear the worst for our future democracy.
"It might be hitting 'ordinary' people in Tunbridge Wells, but 'ordinary people in Tunbridge Wells' are not the same as 'ordinary people'."
ReplyDeleteI live in a semi in the South (is that not ordinary?). My house price is fast approaching the limit.
And how do you define "ordinary"?
Sorry Patrick but what are you on about? So people who work hard all their life, whether from a poor background or rich, have their hard earned assets taken away leaving the family to suffer? Who would work for that? Also, who knows what your IHT money is spent on, you don't specify it do you? It could be given to the NHS, or perhaps it'll go towards security for the Millenium dome, or maybe even Prescott's Jag?
ReplyDeleteBasically this is a tax on hard work which is far more insidious than any other tax, and it certainly is an important issue.
Also perchance how does it effect social mobility? Except by perhaps creating a cycle where middle class sons and daughters are turned out of their home as they need to sell it to pay the tax, and then someone from a lesser rung of the ladder moves into their house while those same sons or daughters pass them on the way down? Of course some rich bugger may buy a second home, in which case there is no mobility at all! Also if you're rich enough you could just hire a fancy accountant to squirrel it all away! Another win for the progressives there!
On your final point; who says owning property is risk free? How are these people going to get loans for businesses or anything else unless they have assets to leverage?
"The tax I will pay will go to the pot that pays for the NHS - of which my family is a heavy user."
ReplyDeleteI don't use the NHS which is why I am sickened my parasites like you who seem to delight in voting to confiscate other people's money so that they can't decide what to spend it on.
I have an idea: how about everybody minds their own business and leaves everyone else alone?
Charity only means something when people donate out of choice.
Balls is not to be Chancellor of the Exchequer; Will Hutton descibes how Brown will "overhaul the British state and make major reforms to key British institutions. In his first 100 days as Prime Minister. " -an office to which he would not have been elected and, in the 'presidential' style constitution into which the UK has evolved, demonstrates a staggering democratic deficit .
ReplyDeleteHe will break up the Treasury "as one of a series of changes to Britain's machinery of government that cumulatively will define him as the architect of a new British state. "
And all this is planned by a man elected only by the members of the current Labour Party, and trades union members, (plus a few odds and sods, many with multiple votes).
Brown seeks "economic stability, to raise the growth of productivity, ensure security of supply of energy... attack climate change, put science and technology at the heart of the emerging knowledge economy and promote open markets ".
Well, wouldn't we all ; is he any better equipped than any of the rest of us to deliver motherhood and apple pie? .
Brown wants "to break up the Department of Trade and Industry , create a ministry of science, fold energy into Department of the Environment and move responsibility for trade to the Treasury... " which "..would be divided into two - a ministry of economy, trade and productivity and a ministry of finance superintending the Inland Revenue, Customs and Excise and government spending [this would] create an independent fiscal authority, mirroring his establishment of an independent Bank of England, that will make independent judgements about public accounts, spending and revenue projections and recommendations' .
Thus "taking the political sting out of the case for tax increases or spending reductions " and, of course, removing direct answerability to Parliament in matters of tax levels etc. Gordon, it seems, "has no great appetite for the government's judgements on taxation and spending being second-guessed, especially in the run-up to what promises to be a closely contested general election." and this action is lauded because "..It would build on his track record of creating independent economic institutions.'
Attempts to emasculate the Treasury invariably have failed in the past but most of the senior level Treasury officials "are his own appointees ", thus weakening any eventual alternative Treasury power base. Brown sees all this as rational and acceptable as it will "enhance his capacity as Prime Minister to continue to have the last word on economic policy." Along with all the other last words enjoyed currently by any prime minister.
Hutton also suggests that Brown will give 'the NHS formal constitutional independence rather like the BBC.' £85 billion of public spending handed to an independent organisation beyond Parliamentary scrutiny?
What has been already decided "..constitutes the biggest ever recasting of the British state since the war. "
The length of this post (and all the Hutton quotes) make it impossible to say 'words fail me', they clearly do not; but for self-aggrandizing, undemocratic subversion, for the setting in place of institutionalised tyranny after years of Blairite autocracy, NuLabour is matched only by the authoritarian statist regimes of the last century, so painfully overthrown.
Whilst I agree with the pinko commenters that IHT is not a vote winner or much of an issue, the financial illiteracy they display in trying to justify their soak-the-rich bigotries is quite breathtaking.
ReplyDeleteStarting with the first anonymong, whos seems to have a god-given right to define "ordinary person". Wealth acquired from the property market is not "unearned income". It is not income of any type, it is captial gain. Unearned income, if such a thing exists, is the sort of income this anonymong gets from his/her savings accounts (or more likely his/her scratch cards). There may be a case for imposing capital gains tax on estates (instead of IHT), but this would be very difficult to define or administer.
Patrick Doolan thinks that owning property is equivant to "doing nothing and adding nothing". Personally, I consider this a better description of the underclasses, who leach considerably more from the taxpayers than the £3bn from IHT.
Whilst I think it is probably good for the soul for each generation to earn its own wealth, it doesn't mean that the state has a right to take a significant lump of an estate from the dead before they are even cold. I would like to see the option of the currently taxed money being put into pension funds for the inheritors. That would allow businesses and properties to remain in a family.
IHT is as much a un-sacred cow for pinkos everywhere as was hunting; ie it is just good old-fashioned envy and class warfare. The pathetic thing about this obsession is that IHT doesn't even touch the very wealthy, who are smart enough to know how to avoid it entirely. The don't call it the voluntary tax for nothing.
So IF Peggy owns a large amount of jewellery her sons will inherit a large pub and will still be left with quite a lot of her jewellery after selling some of it to pay a few thousand in IHT.
ReplyDeleteThe alternative is that I and lots of other people who don't own large pubs would have to pay more tax one way or another.
Seems a fair and sensible way of doing things to me.
inheritance tax should be abolished.. after all the person already paid the tax on his earnings.. it's wrong.. who knows who first introduced this horrible concept anyways??
ReplyDeleteGordon Brown can indulge in whatever megalomaniac statist fantasies of drawing to himself and exerting total control over the entire GDP of the known Universe he likes. Me, I'm going to spend every last penny, while I'm still here to enjoy it. After that I won't feel worried at all.
ReplyDeleteI'd make the point, but I think that anonymous has made it for me.
ReplyDeleteSuggesting that the fantasy people in Eastenders fit into the box marked "average" is stretching it.
The government informs it's loyal citizens that only 6% of estates are ever affected by it? Is that statistic wrong somehow?
Maybe the pub is held in an offshore trust for the benefit of the Mitchell Brothers. Ask Donal Blaney, isn't that what he does for a living?
ReplyDeletecam orf it your avin a girafe,
ReplyDeletePhil would out the tom foolery and ave it up the kermit before the taxman got a sniff.
It's always £3billion off Schools and the NHS.
ReplyDeleteNever £3billion off Stay At Home and Watch TV All Day Benefit.
Amazing how they can close A&E wards because they are a few million short but can always find billions for the idle.
Australia doesn't have IHT.
ReplyDeleteAll their schools and hospitals must be closed.
Labour’s schools n’ospitals argument has worn very thin. The extra spending has failed to deliver any benefits whatsoever in education and any significant benefit – certainly one commensurate with the funds expended – in health. Worse, after the longest period of economic growth in British history, there are 5.4 million people on benefit. Meanwhile, we have a huge number of immigrant workers, many of them working in the black market and not contributing tax.
ReplyDeletehttp://www.timesonline.co.uk/article/0,,2088-2483749.html
IHT is double taxation, it is demotivating and it inhibits capital formation. Moreover, it is incredibly inefficient and diverts talented people into constructing elaborate escapes for the rich while hammering the home-owing middle classes.
Inheritance Tax is not simply about spite (that is just the lure) it about satisfying the Leftist craving for absolute power. The citizens of a fantasy [and in the C20th all too real] Socialist New Society is impoverished citizens wholly dependent [even incorrect thoughts are punished] upon the State. Inheritance of ANY sort undermines this end. It encourages wealth creation, independence of thought, and freedom of action. It is therefore hated by Socialists with a passion.
ReplyDeleteHatfield girl
ReplyDeleteYou forgot "the white hot heat of the technological revolution."
Anon, 3:54
ReplyDeleteYour arguments display the innumerate thinking of the typical NuLabour apparatchik. Being charitable one could say that you are simply thick. A more cynical observer might say that you are deliberately telling porkies.
But to return to the matter at hand, let's apply some maths and common sense to your arguments. Taking your assertions in order:
i)(a)/1 The population of the United Kingdom is generally accepted to be around 60 million, but please provide a reference to your valuation of the uk at £6 trillion. Unverifiable sources quoted as fact are a very strong indication that someone is being mendacious. Given that there is some debte over this, please also provide the definition of a "trillion" as used by yourself.
i)(a)/2 You assume that the country's asset base is spread evenly. This is patent piffle. With somer very rare exceptions people under 25 generally own very few assets. From the CIA world fact book I deduced that this portion of the UK population makes up approximately 1/3 of the total.
Thus your denominator can be reduced to 40 million not 60.
But this is not the end of it. People generally pair up. Whether it is in a traditional marriage, a modern hetero or homosexual union or whatever. Finding a partner is pretty much the norm and asset collection tends to be within these partnerships. Assuming that this state is common but not universal let's divide the 40 million we already have by 1.8. This gives us a new denominator of 22 million asset gathering units (couples and singles).
Sadly the human condition dictates that we all die at some point. When one partner dies the assets transfer to the other partner free of tax (can someone please correct me if this does not apply to civil unions). However when the second partner dies the estate is passed to someone else and is then potentially liable for IHT.
Thus, even using your simplistic approach and dodgy numbers we now have £6 trillion divided by 22 million. Or an average estate of £272,727. Which, as I understand it pushes the average estate over the IHT threshold.
But wait: There's more.
This assumes that assets are evenly spread across the age range. This is patently untrue. As people get older they tend to accumulate assets. And it is generally older people who die leaving estates for the Greasy One to tax. I don't have a numerical value for the distribution of wealth by age, but I would be confident in saying that most people who die do leave an estate worth more than the current IHT threshold.
ii) IHT may raise 3 billion a year, but how much does it cost to collect? What is Greasy Gordon's "profit"? Compared to the simplicity of collecting petrol tax I would imagine the profitability of IHT is relatively low. Therefore 18p per litre is, in all likelyhood, wrong. And so are you and so is Mr Bollox.
I really look forward to your reply.
And a tax on petrol would also be a green tax !
ReplyDeleteTrebles all round !
And a tax on petrol would also be a green tax !
ReplyDeleteTrebles all round !
Iain, how can you abuse Labour for not cutting taxes when the only taxes the Conservatives are keen on cutting is stamp duty on share purchases!?!
ReplyDeleteI am sure many people would support a £3bn reduction in inheritance tax if it was funded by cuts in welfare payments to the workshy.
Besides, Peggy Mitchell would have to sell her pub to pay for her nursing home fees as she lives in England, not Scotland.
You know? Ed Bollox may actually be telling the truth about "only the wealthiest paying IHT". He just doesn't say how much of the population he considers the wealthiest.
ReplyDeleteOf course he wants us to believe he is talking about the top 5% or 10%. Leaving aside the fact that the super rich generally manage to avoid IHT entirely, the statement is equally valid if he means the top 60% or even 99%.
It's classic NuLabour disembling. Not quite an outright lie, but true only as far as it goes.
RM
ps Still no comment from Anon, I see.