[Closed] Completely loaded? Want your kids to be even more loaded?

So you think that your should be able to work hard, save well, but then have to give the money to someone else instead of your children?

Very motivational.

Should be noted that the top 1% of earners pay 27% of income tax. I'm all for a progressive tax system but to then also say they shouldn't be able to pass it on to their children out of "fairness" strikes me more as jealousy than anything that's fair.

Inheritance tax is 40% isn’t it? Over 325k. 36% if 10% of the estate goes to the charity of your choosing

A fair system would be when you choose what to spend your money on. Tax is theft.

Should be noted that the top 1% of earners pay 27% of income tax. I’m all for a progressive tax system but to then also say they shouldn’t be able to pass it on to their children out of “fairness” strikes me more as jealousy than anything that’s fair.

And what is that as a percentage of their total income not just what they declare?

The more you earn the better value good accountants are.

OK I'll spend mine on establishing a bunch of merry men to go around and carry out wealth redistribution

Offshore it, problem solv’ed.

And what is that as a percentage of their total income not just what they declare?

The 27% figure suggests they're paying quite a lot.

Offshore it, problem solv’ed.

That's where mine is, but legit because I live in a zero tax country.

Saying that, with ISAs, you're totally eligible for the tax free investment on your wonga anyway. If you're saving over 20k a year then that's the point at which you're taxed, but how many are.

The 27% figure suggests they’re paying quite a lot.

A lot of what? A lot of money or a lot of their income? What is their overall tax rate?

Your figure is provocative but not informative

Quite (third time's a charm ay Mike 😉

So you think that your should be able to work hard, save well, but then have to give the money to someone else instead of your children?

But we're not generally talking about people who got where they did by working hard and saving well.  Many of these people just get their money from family down the years.  And the amounts of money they're earning are out of proportion to the good they're doing for society.

I think there should be similar rules for everyone.  If middle (clearly not the middle, but bear with me) rich people have to pay inheritance tax etc then people who are even more loaded than them should have to pay it

Very motivational.

I'll not bother replying to this bit as it's just bilge

Should be noted that the top 1% of earners pay 27% of income tax. I’m all for a progressive tax system but to then also say they shouldn’t be able to pass it on to their children out of “fairness” strikes me more as jealousy than anything that’s fair.

Trust me honey.  I'm not in the slightest jealous.  I'm sensible enough to realise how lucky I am from a financial pov.  I can see that there's loads of people who aren't well off and I find it so unfair that there are all these schemes which basically give people who already have load of money loads more.

Two other examples:

My work does a share save match whotsit thing.  If I pay £50 a month into sharesave then the company matches that.  Which is fine, but get this.... that £50 is tax free.

Or I can do a different share save option which allows me to reserve shares at 20% off the market rate at a certain date.   I pile my spare money into that pot and at the end I can either buy the shares at that rate, or if they have fallen in value more than 20% then I have the option to get my money back.   Heads I win, tails I don't lose. So basically the people with a wad of money left at the end of the month have these great options for making stacks more money.  The people on lower salaries don't have £50 spare each month so these benefits are closed to them.

Or the Investment planners.  Worried about Capital Gains Tax...... no problem.  They'll manage your portfolio so that any time your portfolio looks to be appreciating by more than £11,000 they'll sell some of it for you, mix it round a few other options for the minimum amount of time and then reinvest it back into the same shares.  Each year they'll keep doing this for you.  Say at the the of 10 years your £100k portfolio has doubled then you'll have paid **** all CGT.

So you think that your should be able to work hard, save well, but then have to give the money to someone else instead of your children?

Yes. If you have enough money for this to be an issue, you probably have too much. You may think you’re benefiting the economy, but having heaps of cash locked up in assets and savings does bugger all for it. Try a spot of altruism and donate it to charity instead. Or, at the very least spend it whilst you’re alive so you do benefit the economy.

If youre half as good a parent as you probably think you are, you’ll have educated your children well enough so they can make their own fortunes. They don’t need yours.

@fifthirrelevant: I’m guessing with logic like that you were private schooled, and not very well 🙄

Tomhoward:

Inheritance tax is 40% isn’t it? Over 325k. 36% if 10% of the estate goes to the charity of your choosing

Yup agreed (apart from the house exemption up to £1m). But I'm not sure what your point is.  ( I don't mean that in a mean way, I genuinely don't get the thrust of what you're saying)

The 27% figure suggests they’re paying quite a lot.

No. It suggests they're earning quite a lot.

Tax is theft.

Enjoying public services without paying for them is theft.

But I’m not sure what your point is.  ( I don’t mean that in a mean way, I genuinely don’t get the thrust of what you’re saying)

You said that ‘normal’ People would only get £36 of every £100 inherited. Where’s the 64% going?

I thought this thread was going to be about parents teaching their kids how to get really wasted.

You said that ‘normal’ People would only get £36 of every £100 inherited

Righto. Thanks. I didn't actually say that; but what I did say wasn't clear.

When I said set aside, what I meant was from his earnings.(gross earnings)

Option 1:

Put 100 quid in pension pot. Pay no tax on it ( cos of course you don't pay tax on contribs).  Build up a fat pot and give the whole lot to the kids

Option2:

Take that 100 in your wage packet. You pay 40% tax on it so get 60 quid left.

Build up a fairly fat pot and leave it to your kids with the rest of your estate (as above, I'm talking about well off people here who are over the threshold)

The estate pays IHT of  40% on that pot. Ie 24 quid on each of those 60s. Leaving him with 36 quid for each of the hundreds on dad's gross salary

Clear as mud

😁

"But we’re not generally talking about people who got where they did by working hard and saving well.  Many of these people just get their money from family down the years.  And the amounts of money they’re earning are out of proportion to the good they’re doing for society."

That's b'locks. The age of the landed gentry is over. Most wealthy people are people who have made their own wealth. And to say they're doing no good for society when the top 1% pay almost 30% of the tax bill and the top 5% pay something like 60%, and 40% of the adult population don't pay any income tax at all either because they don't work or don't earn enough. And then the more wealthy like their luxury goods so pay alot of VAT too on their big telly's, nice cars, clothes, holidays etc. and pay alot of stamp duty on their expensive homes. All This contributes to the government quaffers which pays for the NHS, national pensions, benefits system, police etc. So take the rich individuals out of it then how on earth are you going to fund these things?

I thought this thread was going to be about parents teaching their kids how to get really wasted.

Just what is it that you want to do?

I think Wobbliscott might be one of them.

I thought this thread was going to be about parents teaching their kids how to get really wasted.

Just what is it that you want to do?

I wanna be free to do what I wanna do

The age of the landed gentry is over. Most wealthy people are people who have made their own wealth

Bollocks. That's just what they want you to believe. Like the American Dream, it's there to give hope to the masses, to let them believe that we live in a meritocracy rather than seeing the reality.

[quote[the top 1% pay almost 30% of the tax bill

Not true.

1% of PAYE earners pay 28% of the income tax bill.. that's not the same thing. income tax is only 25% of the total tax bill.

https://fullfact.org/economy/do-top-1-earners-pay-28-tax-burden/

Inheritance tax is fairest tax of them all. Most of the money hasn't been worked for.... like property gains for instance. Lots of people have seen their property increase in price by 100k+ and paid no tax on the gains, whilst their earnings are taxed at 30-40%.

That doesn't sound fair to me.

Inheritance tax should be 100% and tax on earnings should be 0%.

The age of the landed gentry is over. Most wealthy people are people who have made their own wealth

Bollocks. That’s just what they want you to believe. Like the American Dream, it’s there to give hope to the masses, to let them believe that we live in a meritocracy rather than seeing the reality.

Ermmm. Not according to the Times (Or are they "they")

https://www.thetimes.co.uk/article/sunday-times-rich-list-2018-at-last-the-self-made-triumph-over-old-money-0qx8tqvjp

Inheritance tax should be 100% and tax on earnings should be 0%.

The only proviso I'd put on that would be that money can pass between spouses/partners i.e all assets can be jointly owned between a couple. But other than that I'm on board for this.

Just a few years ago you were able to pay in up to £250000 a year...

£40k was actually seen as quite punative.

So people would gift their fortune to the kids early and live in the family pile gratis and free...

So people would gift their fortune to the kids early and live in the family pile gratis and free…

Agreed, It's more of a thought experiment. Tax dodging scum will always be tax dodging scum whatever the system.

Tax dodging scum will always be tax dodging scum whatever the system.

Yeah, all those pricks with their ISAs, lording it over the rest of us.

Arseholes.

I wanna be free to do what I wanna do

“Okay baby let’s go”

Tax is theft.

Property is theft?

Profit is theft?

Or perhaps there’s a sensible middle way...?  Makes you think...

Take that 100 in your wage packet. You pay 40% tax on it so get 60 quid left.

ah <cough> er, yes, 40%.  We're all higher-rate taxpayers round here, right guys?

<backs slowly out of room>

Why do marxists only drink tea made with tea bags?

Because Proper Tea is theft...

and on a more serious note the tax system should be fluid enough to respond to changes in society and deliver what is best for society, funding social care and refilling the pension pot would be a good use for inheritance tax, I'm also all for limited tax relief on things like pensions to a much lower rate beyond a threshold.

For all those that worked hard and are "self made" remember the roads that move your goods, the system that educates your workers, the health system that got you into the world and will look after you and the stability and security of law and order cost too, without them it would be a lot harder to be comfortable or well off.

Inheritance tax is fairest tax of them all. Most of the money hasn’t been worked for…. like property gains for instance. Lots of people have seen their property increase in price by 100k+ and paid no tax on the gains, whilst their earnings are taxed at 30-40%.

That doesn’t sound fair to me.

i agree, but you need rules to make it “fair” and as soon as you have rules people work the system.  So if I die today my wife should probably keep my (imaginary) wealth.  If we both die our (under 18) children should probably not be left destitute.

A more sensible approach would be to remove the capital gains exemption for people’s primary residence.  A gain is a gain.  It would make much more sense to tax the seller than the buyer anyway.

Inheritance tax should be 100% and tax on earnings should be 0%.

So that encourages people to spend as much as possible early which makes them a burden on the state if the live too long.  With an aging population I don’t think your career in economics is going to work out.  Or as someone else says they game the system by gifting to their kids - that already happens. I

With 100% inheritance tax (mainly from property) you would see the obsession of owning houses drop, prices drop and everyone be better off during their lifetime due to lower rent and mortgages

It is also better to look at what money people are taking from the system rather than what they are paying in tax.

If person A takes £100,000 a year and person B takes £10,000 a year who cares what tax they are paying - person A is still taking a disproportionate amount of money.

And what is that as a percentage of their total income not just what they declare?

The more you earn the better value good accountants are.

OK I’ll spend mine on establishing a bunch of merry men to go around and carry out wealth redistribution

I'm roughly in that top 1% so to answer your question my average direct tax rate (including NI) was around 42% of my total income.  That's average, not marginal.  I've not done this years (2017/18) tax return yet.

As for pension contributions, I don't get to put 40k into my pension as that allowance gets tapered which results in a marginal tax rate of somewhere around 70%.

Or you could see pensions being outside inheritance tax as an incentive for people to save more for their retirement

I think we'd all agree that saving for your retirement is a good thing and ought to be encouraged ??

You can pay your kids bills tax free, so rent, credit card etc. Do that, then make them invest their wages and then you will have nothing left for them to inherit, they will have their own fund instead.

I think we’d all agree that saving for your retirement is a good thing and ought to be encouraged ??

Yes it should, those that have the least need all the help they can get as 1% of bugger all is still bugger all.

You can pay your kids bills tax free, so rent, credit card etc. Do that, then make them invest their wages and then you will have nothing left for them to inherit, they will have their own fund instead.

Or you could just let them be adults and pay their own bills

Whover thinks inheritance tax is the fairest is off their rocker in my book! It's the most arbitrary, unfair and easiest to dodge tax. It's often said that it's an optional tax paid by people who don't trust their relatives.

What about wealth tax? Would that not be fairer? It doesn't exist in the UK (yet), but is stirring things up in France at the moment (although it's now only on real estate).

Or you could just let them be adults and pay their own bills

Woosh, that is the sound of my point flying right over your head.
If you want your kids to inherit some kind of fund or investment from you, then the better way to do is to match their wages with the investment - but, tiny conceptual twist here -if you give them the equivalent of their wages each year then if it is over 3k then its taxable.
HOWEVER......

If they invest all their wages and you pay their rent, phone credit card etc, then you can do that without incurring a tax liability...
Their wages will then grow and provide them with a decent fund to retire early, help their kids etc etc..

Or the Investment planners.  Worried about Capital Gains Tax…… no problem.

You don't need to bother, with ISAs and SIPPs you can keep all your CGs tax free quite easily.

Just a few years ago you were able to pay in up to £250000 a year…

£40k was actually seen as quite punative.

With Carry Forward you can use up the last three years unused allocation, so can still put £120k away in a single year. Main problem now is the Lifetime Allowance, which you'll easily hit with £40k/year unless you make some really bad investment choices.

If youre half as good a parent as you probably think you are, you’ll have educated your children well enough so they can make their own fortunes. They don’t need yours.

I plan to educate my children and help them as much as possible financially. I don't see these as mutually exclusive. Thanks for the parenting advice.

Or, at the very least spend it whilst you’re alive so you do benefit the economy.

No, as lucrative as the state pension is, I'm going to save for my retirement and then spend it.

You may think you’re benefiting the economy, but having heaps of cash locked up in assets and savings does bugger all for it. Try a spot of altruism and donate it to charity instead.

All my assets are in shares of businesses that are out there employing people and creating revenue. I'm saving for my retirement and children’s future but instead I should just give it to charity? Easier to say about someone else's cash.

Trust me honey

Probably not.

Or you could just let them be adults and pay their own bills

Or you could set them up an incredible way with a private education, house and no student debt, giving them a spectacular opportunity I didn't have. Why wouldn't one want that for their children, or to stay on point, if you've worked and saved for that why should it be taken away after you've already been taxed.

Moot point anyway personally as I pay zero tax anyhoo, but that was a major reason behind leaving the UK.

I really struggle to understand the hostility towards IHT in particular. Dead people don't need money. The beneficiaries are usually well-set 50-somethings who don't need it either. They already get £650,000 tax-free, isn't that enough?

If you want to give your kids something, do it when they are young enough to need it, like school-leaving/university age.

Woosh, that is the sound of my point flying right over your head.

Quite the contrary actually, but carry on. I'm from a working class family and parents lived pay-cheque to pay-cheque. I'm now in my mid 30s on a 6-figure salary. Total amount of financial help directly from my parents beyond modest birthday / Christmas presents is as follows:

£3000 for a replacement car when I was 23 and my £900 banger blew its engine and they didn't want me in another death trap. Supposed to be a loan but long ago written down.

£4000 loan when we moved countries eight years ago to help cash-flow, repaid in two months.

Aside from that, we've (wife + I) inherited £10k each from deceased grandparents on either side. Oh, and collectively our parents forced us to let them pay for some of our wedding when we said we weren't going to have a sit-down meal and they protested.

So, enjoy your money, and if your offspring earn it they'll make their own. And if they don't, you won't be doing them any favours by giving them a short-term sugar hit.

Or you could set them up an incredible way with a private education, house and no student debt, giving them a spectacular opportunity I didn’t have.

Wonderful...

I really struggle to understand the hostility towards IHT in particular. Dead people don’t need money. The beneficiaries are usually well-set 50-somethings who don’t need it either.

Simple answer is people are greedy and selfish.  People with money always seem to need even more money,

See post above from person who moved out of UK primarily so they didn't have to pay for any parts of the society they were raised in.

100% inheritance tax ?

There's already nothing to stop anyone on this thread leaving all of their assets to the State if they really want to.

How would me leaving all my assets to the govt address the problem of generational inherited inequality or raise significant tax revenue for the good of the nation?

100% inheritance tax ?

There’s already nothing to stop anyone on this thread leaving all of their assets to the State if they really want to.

Doesn't address the problem of lack of social / financial mobility unless everyone does it.

I think inheritance should just be treated as income and taxed accordingly, so basically 40/45% for most of it.

How would me leaving all my assets to the govt address the problem of generational inherited inequality or raise significant tax revenue for the good of the nation?

Well, every little helps. And after all:

Dead people don’t need money

Or is it only other peoples' money you're happy to give away?

Wonderful…

Yes, every privately educated child is a member of the Bullingdon Club, especially at primary school. Also, where did it get them anyway!?

Also, where did it get them anyway!?

Being accused of sexual relations with a pig's head, and having the notoriety of being so situationally unaware you accidentally destroy the country when trying to settle a petty argument in your own political party. Still, he's rich, I suppose :rolls:

Quite the contrary actually, but carry on.

No exactly, as illustrated by the waffle you made after.

No exactly, as illustrated by the waffle you made after.

No, really it’s you. I fully understand what you’re saying, I just fundamentally disagree with it. The waffle illustrated why.

You seem not to get this, but then those who think that taxes are a game to be dodged and that wealth is a right, rather than something that is earned often have trouble with simple comprehension.

Utter rot, I am not proposing dodging taxes. I am proposing that instead of keeping money doing nothing for 40 years just to then pay IHT on, one should use it to help ones nearest and dearest as they go, and then die with nothing left.Keeping the money circulating is better for the economy and more likely to lead to higher HMRC receipts anyway.  It seems you think people should keep their money under the mattress just so they can meet your pious moral requirement to pay loads of IHT when they die?

This below is the bit where you have had a total comprehension failure. They won't be getting a sugar hit, they won't have any extra money to spend than what they earn, its just that their actual earnings will 100% be invested, and I will pay their daily running costs, and I am allowed to as per HMRC rules. Which luckily means I can do what I propose and you can take your moral outrage and smoke it.

So, enjoy your money, and if your offspring earn it they’ll make their own. And if they don’t, you won’t be doing them any favours by giving them a short-term sugar hit.

Utter rot, I am not proposing dodging taxes. I am proposing that instead of keeping money doing nothing for 40 years just to then pay IHT on, one should use it to help ones nearest and dearest as they go, and then die with nothing left.Keeping the money circulating is better for the economy and more likely to lead to higher HMRC receipts anyway.  It seems you think people should keep their money under the mattress just so they can meet your pious moral requirement to pay loads of IHT when they die?

I'd simply suggesting you spend it yourself to achieve those ends, and your offspring if you've brought them up well will make their own luck. What is it you're actually teaching them by your methods? That financial decisions have no consequences because mummy and daddy will pay for everything? What drivers do they have to become more skilled and aspire to better jobs if everything is paid for in the immediate term by the bank of mum & dad?

And back to that comprehension thing again: so you're spending your money, but investing theirs, and minimising the resources available for the government to spend on essential services as an added bonus for you to the detriment of the country. How is that any different to the wider economy as a net result than them spending their money and you investing yours?

Earn your money, pay your taxes, spend the rest over your lifetime. Let your offspring do the same. No moral outrage involved.

Ok would it make you happy if I just invested my money on their behalf, equivalent to their annual salary? They are not getting anything off me in the short term.

Personally, I think inheritance tax is a great idea. Whilst they're at it, add capital gains tax to houses.

It's entirely inequitable for people to be gifted money entirely randomly - certainly doesn't drive social mobility in anyway. It's not taxing twice - the person who gets it didn't earn it and hasn't been taxed on it.

Whack the IHT to 20k or something, and then tax at 90% above that (after any cohabiting partner has died and any cohabiting children have left full time education).

+1 to that. I can sort of understand the childish sociopathic ****-you attitude that all tax is evil (at least that is consistent, albeit consistent jejune), but why IHT in particular attracts such vitriolic opposition is just really weird to me. Yet some people really seem to want to go to the wall to defend the "right" of middle-aged professionals to cash in a winning lottery ticket that they haven't even bought let alone earned. If you've brought up your kids to be half-decent examples of humanity they will be hugely embarrassed at receiving such a windfall anyway when so many of their friends and acquaintances have no such opportunity, and will in all probability give a large chunk away to charity anyway.