Business Class UK’s Post

🗞 The Labour Party is considering raising money through wealth taxes to invest in public services if they win the election. 🗞 An increase in CGT on assets like second homes and business shares is being discussed, potentially raising £8 billion. 🗞 One option is to change inheritance tax rules for agricultural land and business assets, which some wealthy individuals use to avoid taxes. 🗞 Labour might also consider changes to how inheritance tax applies to gifts. https://lnkd.in/eT54RvW5

Normally taxes are triggered by an event or some behaviour. A death... or trade... or the generation of income or a gain. Wealth taxes simply take things off people even if no event or behaviour occurs. Much closer to what an older generation would call "expropriation" than what is currently understood as "tax" That's a major conceptual shift for the UK. The proponents of such a change need to make a case for that which is stronger than "we want the money"... https://lnkd.in/d65ZVRZD

My friend Grahame Jackson posted on Labour's plans for a wealth tax. This is my thoughts, taken from long comment(s) on Grahame (international tax law expert's) thread. With an added comment criticising the Labour class warriors hostility to private schools based on inverse snobbery and prejudice. What is needed is a philosophical and economic basis to a tax policy. The comments so far are simplistic - this isn't framed as a hit the wealthy (they - Labour - mean 'the Rich', the kind of rich 'they' don't like), it isn't a 98% tax, but it is simplistic group think. 1. There is merit in the idea of taxing 'unearned' wealth, just as there is unfairness in wealth being passed on to successive generations, getting money they haven't earned. 2. But Labour in Britain seem to equate property and owning stuff with wealth and money (just as many old Liberals equate land with wealth) and fail to understand that people with property, land, assets, etc. are often not wealthy or rich. For me the same is the Labour and Tory addiction to unfair National Insurance . 3. National Insurace is a tax on jobs and working people that both Labour and Conservatives claim to oppose but utilise while always failing to get working age people off benefits in to work. 4. Labour and Conservatives both love unfair local property taxes - yes Poll Tax was wrong as not based on ability to pay but Labour believed in rates where people paid tax totally unfairly just based on the value of a property. Neither have proposed a local taxation system based on income and ability to pay. It is massively hypocritical. 5. Liberal Democrat local income tax is fairer, but still doesn't reflect equality in terms of everyone contributing 6. Of course Mansion taxes are aimed at oligarchs and billionaires, but still a taxation policy based on house prices (as Labour love) ignores the fact that house prices are often accidental and often elderly people or retired or older people are living in houses worth a lot but they don't have a lot of income themselves. There is an inverse snobbishness and 'class war' element about these policies. Policies mostly propagated by 'middle class' professionals who did elite degrees at elite universities protesting that they are 'working class'. 7 follows - my comment on the Labour prejudice against parents spending money on education.

Tax in the UK needs simplifying. The Labour Party plans to close non-dom Income & CGT, plus IHT loopholes on offshore trusts by abolishing transitional reliefs and ending 'excluded property' status. They also confirm no plans for a Wealth Tax or targeting expensive houses. Is this simple enough?

This is highly speculative at best, but according to ‘senior Labour sources’ who have spoken to the Guardian, there may be ‘radical changes’ made to the #iht regime under a Labour government, such as scrapping or updating the rules on APR and BPR, and possibly raising the rate of #cgt on sales of second homes or shares. About the IHT plans: “Plans being considered contain a sliding scale of options to weigh up the likely gain for the exchequer, including capping the benefit from agricultural and business relief at £500,000 for each person, rather than scrapping it. In some instances, both forms of relief could be claimed, allowing for a cap of £1m for each person in effect. This would still raise about £2.3bn by 2029-30, which would be at the end of the OBR’s forecast period if it was introduced in March next year, according to a paper published by the IFS in 2023. The same figure appears in one of the internal Labour documents seen by the Guardian. Sources said wider changes were also being considered on gifts and inheritance tax. Currently, no inheritance tax is due on gifts if they are made by a person who lives for more than seven years after the gifts are made.” https://lnkd.in/ewdMjKZS

“This measure will limit opportunities for all generations and make Canada a less competitive, and less innovative nation,” the groups wrote. “At a time when we are already urgently struggling to reignite our nation’s lagging productivity, increasing taxes on productive investments and throttling Canadian potential will have profound, long-lasting and potentially irreversible repercussions.”  Taxation IS THEFT in this country when we see BILLIONS WASTED on corporate welfare for EV firms, grocers, and press outlets and UNRWA Hamas terrorists. The USELESS federal government DOESN'T deserve ONE RED CENT more in tax and should CUT SPENDING AND TAX. https://lnkd.in/gufcpxQV

Labour vows to fund NHS pledges by tackling tax dodgers. Labour is pledging to fund policies on the NHS and school breakfast clubs by boosting efforts to tackle tax dodgers. Shadow chancellor Rachel Reeves says plans to give more money to HM Revenue & Customs tax officials would help raise £5bn a year. The party had to find a way to plug the gap in its spending commitments after the government adopted its plan to scrap non-dom tax status. It says it will also raise £2.6bn by closing "loopholes" in the government's plans to abolish non-dom exemptions. https://lnkd.in/efA-riWs

If you spend 5 minutes doing anything today then just to read this The Guardian article as it sent shivers down my spine. A few things that hit home: 1) A further £25bn of tax increases from Reeves would push tax close to 38% of GDP. 2) Since the middle of last month, the interest rate – or yield – on 10-year UK gilts has increased from 3.75% to just below 4.2%. 3) IFS says an ageing population and the loss of fuel duty and tobacco revenue as people switch to electric vehicles and stop smoking would mean further tough packages in the future. I can predict the next government will absolutely increase VAT and or income tax as these crazy election promises to not raise direct taxes means the chancellor is rearranging the deck chairs on the titanic whilst the band is playing “things can only get better” Perhaps we will see Rt Hon Rachel Reeves dance up to the podium with this ditty playing in the background on the 30th October! https://lnkd.in/eZxe8B6i