BeerCat
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Corruption allows this not capitalism.. Anyone with a braincell can tell it's wrong yet it's enabled by scum politicians. Sure I have seen it over 2000%
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Corruption allows this not capitalism.. Anyone with a braincell can tell it's wrong yet it's enabled by scum politicians. Sure I have seen it over 2000%
Dutto
Landlord.
I like to think that I have more than one braincell untainted by excess beer, but just in case I'm wrong I refer you to the Financial Conduct Authority which states that the Company who advertises on the TV is:
Authorised A firm that is given permission to provide regulated products and services.
Effective Date This is the date from which the Current Status has applied. 29/01/2016
I wonder which "scum politicians" were in power back then and are currently letting this company get away with usury on such a scale? :whistle:
Saisonator
Landlord.
Interesting conversation relating to this subjest
Dutto
Landlord.
A superb discussion with some really rational explanations of what is happening in our world today.
It's quite a timeous discussion because today our esteemed Chancellor has ordered a review of the UK's Inheritance Tax to make sure that the rich stay rich!
Of course, he can't actually say that so The Torygraph has run the headline;
Inheritance Tax Review: More help for parents to get their children on property ladder.
Yeah, right! The moon is made of Cream Cheese as well.
They are homing in on the £3,000 limit that you can give away every year and how more than this is subject to Inheritance Tax if the average exceeds this amount when you cock your clogs.
I would like to point out that the government that is now complaining about the cost of housing is the same government that sold off most of the UK's Social Housing and has failed to build enough houses with the sole intention of keeping the price high!
Things have to change!
It's quite a timeous discussion because today our esteemed Chancellor has ordered a review of the UK's Inheritance Tax to make sure that the rich stay rich!
Of course, he can't actually say that so The Torygraph has run the headline;
Inheritance Tax Review: More help for parents to get their children on property ladder.
Yeah, right! The moon is made of Cream Cheese as well.
They are homing in on the £3,000 limit that you can give away every year and how more than this is subject to Inheritance Tax if the average exceeds this amount when you cock your clogs.
I would like to point out that the government that is now complaining about the cost of housing is the same government that sold off most of the UK's Social Housing and has failed to build enough houses with the sole intention of keeping the price high!
Things have to change!
Unless I'm misunderstanding the point you are making, that's likely worse for rich people than the current system. Currently you can give away as much as you like without inheritance tax becoming due, provided you live for another 7 years. Currently granny sells her home and gives the money to the kids, stick her in a home for the next 8 years at the government's expense* and there we have it, no IHT due. So if it's a hard £3k limit each year and stays with you for life, it's not all that good. I would assume the exemption threshold would be scrapped too.
Compare 80 years x £3,000 to £325k flat exemption + complete exemption on every gift > 7 years.
*Note the uproar in the press and by Labour / Lib Dems when it was suggested by the Conservatives the value of a home should be used to fund the cost of providing elderly care...
Dutto
Landlord.
My point is simple, the current rules on Inheritance Tax already take the subject way beyond the "estate value" of 95% of the population as per this:
"There’s normally no Inheritance Tax to pay if the value of your estate is below the £325,000 threshold." (*)
Also, with regard to "gifts" there is already a sliding scale on the amount of tax to be paid in the event of the donor of the gift dying as per this:
"IF there’s Inheritance Tax to pay, it’s charged at 40% on gifts given in the 3 years before you die.
Gifts made 3 to 7 years before your death are taxed on a sliding scale known as ‘taper relief’ as follows:
Years between gift and death Tax paid:
So, as far as I am aware, when taking the current rules into account, the ONLY way to make a "gift" big enough to buy a house exempt from Inheritance Tax within the current seven year period is to raise the £3,000 threshold to a level that is way beyond what the ordinary person in this country could possibly afford OR scrap the seven year period.
Note:
(*) Inheritance Tax is paid on assets AFTER the £325,000 threshold has already been deducted.
https://www.gov.uk/inheritance-tax/gifts
"There’s normally no Inheritance Tax to pay if the value of your estate is below the £325,000 threshold." (*)
Also, with regard to "gifts" there is already a sliding scale on the amount of tax to be paid in the event of the donor of the gift dying as per this:
"IF there’s Inheritance Tax to pay, it’s charged at 40% on gifts given in the 3 years before you die.
Gifts made 3 to 7 years before your death are taxed on a sliding scale known as ‘taper relief’ as follows:
Years between gift and death Tax paid:
- Less than 3 = 40%
- 3 to 4 = 32%
- 4 to 5 = 24%
- 5 to 6 = 16%
- 6 to 7 = 8%
- 7 or more 0%"
So, as far as I am aware, when taking the current rules into account, the ONLY way to make a "gift" big enough to buy a house exempt from Inheritance Tax within the current seven year period is to raise the £3,000 threshold to a level that is way beyond what the ordinary person in this country could possibly afford OR scrap the seven year period.
Note:
(*) Inheritance Tax is paid on assets AFTER the £325,000 threshold has already been deducted.
https://www.gov.uk/inheritance-tax/gifts
Agree on the IHT rules. The gifts in the previous 7 years are also added to the donor's estate at death but those earlier gifts use up the exemption first.
The bit I'm not clear on is why replacing the rules would make the rich richer? Are you saying that because this reduces the thresholds at which IHT becomes payable, on a net basis, a poorer estate now has less cash under the new rules and so only a richer estate leaves enough net to buy a house?
Hope you don't think I'm looking for an argument here - I'm genuinely interested in how tax works and what it all means in practice, so actually want to understand your perspective. I find inheritance a particularly interesting social concept too. Need a geek smiley!
The bit I'm not clear on is why replacing the rules would make the rich richer? Are you saying that because this reduces the thresholds at which IHT becomes payable, on a net basis, a poorer estate now has less cash under the new rules and so only a richer estate leaves enough net to buy a house?
Hope you don't think I'm looking for an argument here - I'm genuinely interested in how tax works and what it all means in practice, so actually want to understand your perspective. I find inheritance a particularly interesting social concept too. Need a geek smiley!
Dutto
Landlord.
That's my perspective.
As far as I can work out, they are the only two methods available to change the Inheritance Tax to let someone escape the tax if they "gift" a child enough to buy a house ...
.. and that option would only be open to people who are sufficiently wealthy to make the "gift". i.e. The very rich.
Imagine the impact. A massive Tax Avoidance door would be opened to those who would be paying Inheritance Tax; all they would have to do is to buy their children (mine are currently over 50 years old but they are still "my children") a house. I'd bet good money on the fact that they wouldn't be buying them a "Two Up - Two Down" house in a village.
simon12
Landlord.
Inheritance tax isn't something I know much about but I just wonder how they enforce many of these gifts, ie if someone bought a large amount of gold, bitcoin, transfers to unknown foreign accounts or even large cash withdrawals that noone knows (or admits to knowing) what happened to how far do they investigate? Do they hassle recently bereaved to produce evidence of there finances for the last 7 years?
Dutto
Landlord.
Yes. Only it isn't "hassling" it's applying the Tax Laws!
I had a mate up in Scotland who apparently "owned" a 5,000 acre estate that contained a load of forestry, a few houses, two farms and a 22 room mansion. There was a slight problem in that he didn't actually "own" many of the valuable things that were kept in cabinets and hung on the walls of his mansion. (He even had an original Matisse painting in his toilet!)
Rather than pay the Inheritance Tax that his predecessors had owed HM Revenue they had been allowed to "donate" a shedload of paintings, ivories, statues, bronzes and other valuable articles to the government. The value of these goods were then off-set against the Inheritance Tax due so that no money actually changed hands.
Here's the rub. NONE of these very valuable articles actually left the premises, the "owner" (i.e. the government) was responsible for their insurance, the original owner still has the benefit of their presence, members of the public may only view the articles by appointment and their status is contained in an unpublished "catalogue" held in London (Somerset House I think.)
An artist friend of mine tried to track down the Matisse and discovered that the "catalogue" was a random collection of works of art with no actual grouping such as Artist's Name, Location, Date of Acquisition etc. In other words, finding out about any particular item is a major task.
The whole system falls into the "Nice if you can get it." category; or "scam" if you wish to give it a more realistic name.
Tax works on a self-assessment basis and so the burden is on the taxpayer, not HMRC, to get things right. That puts the risk of penalties on the estate. One of the issues with IHT is that the tax is payable within 6 months of death, which can be tricky both emotionally and practically (e.g. clearing and selling a house in that time).
Detection of clear evasion is always the problem for HMRC. From an IHT perspective, there's normally a solicitor involved somewhere, either making sure a power of attorney is effective or ensuring the assets go to the right beneficiary (either in accordance with a will or under general law). They'll be interested in ensuring the tax affairs are in order.
Other channel is that a house will be the main asset giving an estate its worth. That will need to be transferred legally and the government have access to those records via land registry, which they can cross-check against death certificates etc. Again, the transfer of land requires a qualified conveyancer who, in turn, will be bound by certain rules to ensure everything is above board.
But there will always be people who just lie.
simon12
Landlord.
Cheers bezza so its like when you do a tax return so if £100,000 pounds worth of gold coins was purchased 6.5 years before and no one was admitting to having received it then it would be left of of an inheritance tax return (or whatever its called).
Pretty much. Although given the £325k threshold is applied to the oldest gifts first, it might be correct that there is nothing to pay if you received £100k of gold coins 6.5 years ago. It would be the residual estate that had underpaid the taxes if they had claimed the full £325k exemption.
Certain things HMRC will not know about per se, but despite what you hear in the press, it's incredibly hard to hide these things. With anything of monetary value, you tend to have to deposit it somewhere - in a bank, in a trust - and have some record of it being there. Those institutions will be monitoring for anything suspicious and have a variety of reporting obligations where there is anything fishy going on, even if it's you not declaring taxes correctly. The threshold for this is mere 'suspicion' rather than 'evidence'.
Dutto
Landlord.
I loved the mere "suspicion" comment. I worked on a bonded tank farm many years ago and one of the employees was caught by HM Customs and Excise (as it was then called) stealing petrol. During the subsequent investigation they "assumed" that:
Two years after he had been fired, the man finally got a job on the Tank Farm of a new refinery in the area and things started to look up for him; right up until the local officer from HMCE wrote to the refinery and stated "We have no confidence that this man can work in a bonded store." It was beyond HMCE powers to insist that the man be fired but they could always remove the "tax-free" part of refinery operations which could have cost the refinery hundreds of thousands of pounds.
After many discussions with HMCE the man was finally employed on the Black Oils section of the refinery, well away from anything that was tax free and could be stolen.
The lesson I have learned from witnessing this is "Do not mess with Customs and Excise!"
- He must have put petrol in his new car so they confiscated that. (Value +/-£1,000)
- They caught him stealing 5o gallons and he had worked there for five years so they multiplied 5 x 12 x 50 (3,000) and assumed that he owed them the tax on 3,000 gallons which at the time came to £375.
- They then took him to court for avoiding tax and he was fined £200.
- The company took him to court for stealing the petrol and he was fined £50.
Two years after he had been fired, the man finally got a job on the Tank Farm of a new refinery in the area and things started to look up for him; right up until the local officer from HMCE wrote to the refinery and stated "We have no confidence that this man can work in a bonded store." It was beyond HMCE powers to insist that the man be fired but they could always remove the "tax-free" part of refinery operations which could have cost the refinery hundreds of thousands of pounds.
After many discussions with HMCE the man was finally employed on the Black Oils section of the refinery, well away from anything that was tax free and could be stolen.
The lesson I have learned from witnessing this is "Do not mess with Customs and Excise!"
MarkBowie
Regular.
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There are already certain stipulations that enable gifts to be given that means they get written off by a probate court. First house, first car, birthdays etc all fall outside the amount that count towards the inheritance tax limit. There are also quite a few pension products out there that allow an individual to accumulate their wealth in to one pot that can be donated on death to a child with it being ringfenced from the tax allowance. If you pay your taxes, do your bit etc there is no reason why you shouldn’t be able to leave your estate to your kids; toff or not.
I've got a pension that does that! Hopefully I'll live long enough that he'll not get his grubby little mitts on it, and the only other things he'll inherit amounts to whatever homebrew I've got plus equipment, a motorbike and car, and a phenomenal stereo system with half a million records and CDs to play on it.
BeerCat
Landlord.
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I had a dyslexic moment the other day and thought i saw a link for "Kegging with the Kardashians".
Famous for having massive arses.....most women don’t want a massive arse!
Dutto
Landlord.
I'm speaking from personal observation here ...:wave:... there has to be a link between women who use Skimmed Milk and the size of their derriers!
Personally, I think it's an example of "Cause and Effect" in action.
Saisonator
Landlord.
I think you'll find many do, that's why they are all doing squats in the gym.
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