UK General Election 2024

[Welly]

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[ChrisC]

Every reference I have heard in relation to the level of State Pension in recent years, both by the Government and the media has been about the New State Pension. Due to the Triple Lock rules this has risen significantly because of the high inflation during these last few years. Pensioners who are receiving this pension are now getting £221.20 a week which amounts to £11,502 a year. I can understand some younger people who are struggling not being too happy about this.

However, this level of pension is only received by those who have reached State Pension retirement age since 2016. People who reached State Pension age before that date, meaning most people aged 75 and above are only receiving the old basic pension of £169.50 a week which only amounts to £8,814 a year. These older pensioners have also benefited from the same percentage rises due to high inflation but of course that means a smaller increase each year. The difference between the old and new State Pensions is getting wider each year. Every time pension levels and increases are mentioned it gives the impression to younger people that all pensioners are now getting £11,502 a year but that is far from true. I have a number of older relatives in their 70’s and 80’s who are only receiving £8,814 a year. I do appreciate that they were able to retire and receive their pension at a younger age than people do now.

 

[JamesT]

Every reference I have heard in relation to the level of State Pension in recent years, both by the Government and the media has been about the New State Pension. Due to the Triple Lock rules this has risen significantly because of the high inflation during these last few years. Pensioners who are receiving this pension are now getting £221.20 a week which amounts to £11,502 a year. I can understand some younger people who are struggling not being too happy about this.

However, this level of pension is only received by those who have reached State Pension retirement age since 2016. People who reached State Pension age before that date, meaning most people aged 75 and above are only receiving the old basic pension of £169.50 a week which only amounts to £8,814 a year. These older pensioners have also benefited from the same percentage rises due to high inflation but of course that means a smaller increase each year. The difference between the old and new State Pensions is getting wider each year. Every time pension levels and increases are mentioned it gives the impression to younger people that all pensioners are now getting £11,502 a year but that is far from true. I have a number of older relatives in their 70’s and 80’s who are only receiving £8,814 a year. I do appreciate that they were able to retire and receive their pension at a younger age than people do now.

The old state pension was split into two parts, £8,814 is the full amount of the Basic State Pension. But unless they were very badly paid throughout their lives, there will also be either Additional State Pension https://www.gov.uk/additional-state-pension or if they were contracted out then extra money would have gone into their workplace pension.

 

[Cross City]

Interesting discussion I saw on Reddit this morning.

What 5 realistic, affordable and popular with at least 50% of the public would you like to see in Labour's Manifesto.

It took me a while to come up with some, which I'll reveal in a bit.

 

[jfollows]

What 5 realistic, affordable and popular with at least 50% of the public would you like to see in their Manifesto.

Whose?

 

[Gloster]

Interesting discussion I saw on Reddit this morning.

What 5 realistic, affordable and popular with at least 50% of the public would you like to see in their Manifesto.

It took me a while to come up with some, which I'll reveal in a bit.

Tougher sentences for geography teachers.

 

[Cross City]

Whose?

Apologies. Labour.

I was copying my paragraph from another forum.

 

[Magdalia]

The current system is a bit bonkers, and the Conservative proposal makes it more so.

The state pension is paid gross, and whilst it is less than the income tax personal allowance it's simple if it's your only source of income. But if you have other income which puts your income above the personal allowance you have to get the tax code on your other income source adjusted to take off the right amount of tax.

There is another bonkers dimension to this.

There is now the option to defer state pension after retirement age, receiving an actuarily increased payment starting at a later date.

For people with no other income, we will reach the situation where those who take their state pension straight away will not be liable for income tax, but anyone who wants to defer their pension will be liable for income tax on their actuarily increased pension, once they opt to take it, and HMRC will have to devise a way to collect it.

 

[railfan99]

HMRC will have to devise a way to collect it.

I'm not from the UK, and overseas in 'the colony' so I can't keep up with every announcement: apologies.

At this early stage in your formal campaign, have any of the three or four main parties said anything yet about any proposed changes to what seems at face value your draconian inheritence taxes: 40 per cent (some exemptions), seven years' residency required for some concessions and so on if I've correctly read about it?

Or is it such an important part of HMRC's 'inwards goods' that in government, a party with a large majority in the House of Commons might look at increasing it further?

 

[LNW-GW Joint]

I don't know how representative of the business world this is, but 121 businesses publicly backing Labour is a strong endorsement:

I don't expect the transport groups (First, GoAhead, Transport UK, Arriva and Serco) are among them.
But it's why Labour is not going for full 1948-style rail nationalisation.
The water/energy sectors will be a bit tricky, too.
Labour won't want to turn off the private investment taps.

 

[sor]

At this early stage in your formal campaign, have any of the three or four main parties said anything yet about any proposed changes to what seems at face value your draconian inheritence taxes: 40 per cent (some exemptions), seven years' residency required for some concessions and so on if I've correctly read about it?

Hardly anyone actually pays inheritance tax as there are fairly large thresholds, particularly for spouses and children of the deceased.

The seven years thing is in reference to "gifts".

 

[Gloster]

I'm not from the UK, and overseas in 'the colony' so I can't keep up with every announcement: apologies.

At this early stage in your formal campaign, have any of the three or four main parties said anything yet about any proposed changes to what seems at face value your draconian inheritence taxes: 40 per cent (some exemptions), seven years' residency required for some concessions and so on if I've correctly read about it?

Or is it such an important part of HMRC's 'inwards goods' that in government, a party with a large majority in the House of Commons might look at increasing it further?

There has been a certain amount of talk in recent years about abolishing Inheritance Tax, but (so far) I have not seen a great deal this election. It is beginning to become clear to a fair number of voters that the people who will gain most will be the rich and very rich, while the rest will end up having to either make up the loss in income or suffer the results of this reduced income. It is true that increased property prices, particularly in the South-East, have pushed some people up into the Inheritance Tax band, but the housing situation is so bad that many can do no more than dream of owning an house that would make them subject to the tax…or even owning any house at all. A bit of tweaking of the details and the amounts might be in order, but I can’t see that as being an urgent necesssity.

 

[pokemonsuper9]

getting a 5 (old grade C) and a 4 (old grade D)

Slight note, a 4 is a low C, a 5 is a high C/low B
4 or above is considered a pass, 3 or below isn't.

 

[jfollows]

Nigel Farage (https://www.theguardian.com/politic...ensioners-labour-rishi-sunak-general-election):

This election is a foregone conclusion. Labour are going to win and they’re going to win quite big. And therefore, you could argue actually, that a vote for the Conservative Party is a wasted vote. And given that, you know, Labour are going to win, why not vote for something that you actually believe in?

He is at least free (as ever) to appear to tell the truth, unlike Conservative MPs unless they are totally deluded.

 

[Magdalia]

At this early stage in your formal campaign, have any of the three or four main parties said anything yet about any proposed changes to what seems at face value your draconian inheritence taxes: 40 per cent (some exemptions), seven years' residency required for some concessions and so on if I've correctly read about it?

UK inheritance taxes are not draconian, only about 4 per cent of deaths result in inheritance tax payments.

The main exemption is that no taxes are payable on estates smaller than £325k.

 

[Howardh]

UK inheritance taxes are not draconian, only about 4 per cent of deaths result in inheritance tax payments.

The main exemption is that no taxes are payable on estates smaller than £325k.

Inheritance Tax can have a £1m exemption; something like this; On death one passes on their allowance to spouse (£650k) and if their dwelling is worth more than £350k you get that house allowance of £350k tax-free, so that makes one million tax-free.

My father's allowance was passed on to mum, in 2020 on her death I (almost) got the full allowance minus the value of the shares dad left to me on his death (2018)

I don't think all this has been really publicised, focus seems to be on the individual allowance rather than the nuts and bolts of it all. But it is complex and has to be done at a very sad/depressing stage of your life.

 

[JGurney]

Hardly anyone actually pays inheritance tax as there are fairly large thresholds, particularly for spouses and children of the deceased.

The seven years thing is in reference to

At this early stage in your formal campaign, have any of the three or four main parties said anything yet about any proposed changes to what seems at face value your draconian inheritence taxes: 40 per cent (some exemptions), seven years' residency required for some concessions and so on

Nothing draconian about them. Only the seriously rich pay any substantial inheritance tax, and so they should.

In general, there is no inheritance tax upon sums under £325k. Where the inheritance consists of residential property formerly belonging to the heirs parents or grandparents this allowance can reach £1m.

E.g if your parents had jointly owned a house worth £900k, which on the death of one passed to the survivor and then in course of time to you and any siblings, there would be no inheritance tax chargeable at all. If the house had been worth £1.1m then there would be a tax bill of [( £1 100 000 - £1 000 000) x 0.4] = £40 000 which is approx 3.6% of the total inherited.

 

[davews]

Single person with nobody to pass their house on to or a partner to pass your inheritance on to has virtually no way to avoid IHT. My house bought for £12.5k in 1977 is already now well above the threshold.

 

[Howardh]

Single person with nobody to pass their house on to or a partner to pass your inheritance on to has virtually no way to avoid IHT. My house bought for £12.5k in 1977 is already now well above the threshold.

If one is in that situation, can they divide up their estate into several packages so each one avoids IHT? Thinking, say, a £500k estate including house/cash split between two or three different charities?

 

[zero]

If one is in that situation, can they divide up their estate into several packages so each one avoids IHT? Thinking, say, a £500k estate including house/cash split between two or three different charities?

No, because IHT is paid from an estate. However if you will your estate to charity there is no IHT anyway I think.

 

[Howardh]

No, because IHT is paid from an estate. However if you will your estate to charity there is no IHT anyway I think.

Must ask England Curling to make themselves a charity then!! **If I've enough to leave, that is!!!*

 

[zero]

Inheritance tax is only really draconian on semi-rich people, and rich people who die *unexpectedly*, or people who can't give up control.

If you don't die unexpectedly it is very easy to avoid IHT by giving most of your stuff away - that's the 7 year rule, but you have to give up control or else the assets may still be regarded as yours.

Any couple who expects to die with over £2M - well, their heirs - would benefit from estate planning which can significantly reduce the IHT that could be due, and anyway such people probably have an option to leave the UK, so by staying in the UK they are making a conscious decision to have IHT apply to their estates.

Also there is no IHT on gifts out of excess income, on certain business property, on certain unlisted shares etc., it's pretty easy to avoid if you really want to.

 

[Howardh]

Inheritance tax is only really draconian on semi-rich people, and rich people who die *unexpectedly*, or people who can't give up control.

If you don't die unexpectedly it is very easy to avoid IHT by giving most of your stuff away - that's the 7 year rule, but you have to give up control or else the assets may still be regarded as yours.

Yes, and also parents are allowed to "gift" their children £3000 each/year and that doesn't count towards IHT, which can be £60,000 untaxed on top of the remaining estate assuming they live for ten years after the first gift. Also they may be allowed to give more if it doesn't affect the donor's lifestyle - however even after discussing this with solicitors and accountants, never got to the bottom of it so I'd like to be educated - anyone use that extra extra allowance??

 

[zero]

Also they may be allowed to give more if it doesn't affect the donor's lifestyle - however even after discussing this with solicitors and accountants, never got to the bottom of it so I'd like to be educated - anyone use that extra extra allowance??

That's gifts out of excess income.

If you have a certain amount of income and it's not needed to support your lifestyle, and it can be shown that you haven't lowered your lifestyle in order to increase your 'excess income', then you can give all of that income away without it being potentially subject to IHT should you die within 7 years.

This income is probably going to be from things like dividends or rent, as often pensions are not considered part of one's estate. But you have to receive that income close to the time that you give it away - it can't be assets that you already held.

 

[HSTEd]

That's gifts out of excess income.

If you have a certain amount of income and it's not needed to support your lifestyle, and it can be shown that you haven't lowered your lifestyle in order to increase your 'excess income', then you can give all of that income away without it being potentially subject to IHT should you die within 7 years.

Honestly, I've come to the conclusion that IHT simply isn't worth it.

It produces an enormous bureaucracy around probate and estate management, and it doesn't even manage to raise a significant (on national scales) sum of money.

We have this enormous bureaucracy, and an industry of very expensive people helping people get out of it, when it raises only £7.5bn a year!
It doesn't even reduce wealth inequality much because there are too many ways to engineer a way out of paying it.

For context, it doesn't even raise as much money as Vehicle Excise Duty.

 

[Howardh]

HOnestly I've come to the conclusion that IHT simply isn't worth it.

It produces an enormous bureaucracy around probate and estate management, and it doesn't even manage to raise a significant (on national scales) sum of money.

We have this enormous bureaucracy, and an industry of very expensive people helping people get out of it, when it raises only £7.5bn a year!
It doesn't even reduce income inequality much because there are too many ways to engineer a way out of paying it.

For context, it doesn't even raise as much money as Vehicle Excise Duty.

Tend to agree but it's too late for me! Thing is, all that money in the deceased's account has probably been taxed anyway, there is income tax, savings tax and maybe even IHT already paid if it's an inherited sum. And, of course, the beneficiaries are going through the hardest time of their life and probate on top....

Plus you get the spouse passing on to spouse complication, and that of the house, it all seems unnecessary for what the government gets out of it.

 

[najaB]

There's definitely scope for simplifying inheritance tax, but scrapping it completely isn't a vote winner since it's (correctly?) seen as a tax on the very rich to help the average punter.

 

[SuspectUsual]

Honestly, I've come to the conclusion that IHT simply isn't worth it.

It produces an enormous bureaucracy around probate and estate management, and it doesn't even manage to raise a significant (on national scales) sum of money.

We have this enormous bureaucracy, and an industry of very expensive people helping people get out of it, when it raises only £7.5bn a year!
It doesn't even reduce wealth inequality much because there are too many ways to engineer a way out of paying it.

For context, it doesn't even raise as much money as Vehicle Excise Duty.

In principle I agree with you from the point of view of bureaucracy and that a lot of the very wealthy seem to manage their liabilities very well.

However, its seen by many as a "fair" tax on the rich

But - and let's disregard the spending side for now - if you lost this £7.5bn, where would you get it back from?

 

[HSTEd]

But - and let's disregard the spending side for now - if you lost this £7.5bn, where would you get it back from?

There would probably be a few hundred million saved from admin costs, although its not clear how big IHT admin costs are.

It represents less than 0.7% of government tax receipts.
There is likely scope for increasing gambling, tobacco or similar duties, and obviously the fiscal drag from not raising income tax thresholds would make it good pretty quickly.

On a large scale, we could knock a couple of percent off national insurance and put it onto income tax instead. Which would be a move towards the abolition of National Insurance, which probably needs to happen anyway.

 

[Urobach]

Police to take no further action over Angela Rayner housing allegations

Greater Manchester Police is taking no further action over allegations concerning Deputy Labour Leader Angela Rayner's living arrangements before she was an MP.

Questions had been raised over whether she owed tax on a house she sold in 2015, and if she registered to vote at the correct address.

She had promised to step down if she was found to have committed a criminal offence, and insisted she had followed the rules at all times.

Greater Manchester Police launched an investigation earlier this month into whether "any offences have been committed". The force has not said exactly what it has been investigating.

BBC News

https://www.bbc.co.uk/news/live/uk-politics-69063295