Westminster Politics 2024-2029
- Thread starter Pexbo
- Start date
That or like @Jippy said, move somewhere low tax for a while.
It's not pleasant that's for sure. Especially when I feel I'm getting almost 0 value from the UK state for the taxes paid. I pay for everything privately (transport, housing, childcare, healthcare, pension)
If you put everything into pensions, you can’t access them until you retire? The problem is that most people like me need the cash now for families and as others have mentioned, the taxes aren’t paying for the services they are supposed to so you have to look at more private stuff.
You do then really have to think about any pay rises you get because you could be worse off and get out of thresholds for other things.
yeah i feel the same way. the only thing i have taken back was the 30 hours free childcare from the age of 3 for both of my kids. that only got them mon-wed free each week, and we had just over two years of paying full whack beforehand. we still spent nearly £100,000 on nursery fees just for the privilege of my wife taking home about £150,000 in the same time frame. we only did that because of how hard she’d find coming back to the same level job after having to take 7 years out to get the kids to school age. the real fecking to have kids only takes place after you’ve had them in the uk.
you can’t access them until 55, and totally agree at lower salaries, you need the money now and not in 20/30 years time. but if you’re already taking home £5.7k a month, is £6k a month instead going to revolutionise your life? or is it better to put the full £800 a month into your pension? you do that over 20 years and get an 8% return, that loss of £300 a month (that you didn’t have to play with the month before) equates to £322,000 in your pension.
if you took the £300 a month and saved it yourself, it would only be worth £122,000 at 8%. in any case, it’s far more likely you’ll just spunk the £300 on deliveroo or ivory back scratchers and have nothing extra after 20 years. if you’ve got nursery fees or high interest loans etc, it probably makes sense to take the extra £300 to help tackle those, but in the majority of cases, a pension always wins. it’s also exempt from inheritance tax, which is a bonus.
it sucks that in the uk it’s been pensions and latterly property that have been the only way for the common man to save anything meaningful for retirement.
I agree with what you are saying, but the US has higher taxes than everytone thinks.
If you live in new york, you pay federal, state AND local income tax, plus payroll deductions too. But the kicker is the wealth tax.
Property taxes are circa 1% of the property value, every year. That can become a big number, very easily.
Its still less than we pay here, but the gap isn't as big as it seems.
I can second that, taxes in the US are not always as low as you think, a lot can depend on which area of the country you live in, but a basic rule of thumb is that the lower the taxes the lesser the services provided by the state/city, another consideration is the cost of health insurance, technically you can do without it, but in reality everyone needs it at some point, otherwise you'd be the healthiest person that every lived, and given the crap they put in food here I don't think that would be possible!
The government says they provide 15 hours of free childcare. 30hrs in some cases, if both parents are working and their individual income is not above 100k. We're not eligible for 30 because of the latter clause.
However, the "free hours" are not free because their contribution is capped at £6 per hour. In London, the average hourly rate is £10-12. We pay £11. So the government covers 55% of the cost for 15 hours. While we use 50hrs per week. Long story short, the government only covers only 16.5% of our total cost. The total cost is £1,892 pcm and the government pays £312 of that, leaving us with £1580 to pay every month.
At two kids, you're basically better off paying for a full-time nanny. Because to pay £3.1k every month, is basically to sacrifice a £47k gross salary. And if you want more kids, you better space them out better or the missus becomes a SAHM.
you’re eligible if you salary sacrifice into your pension to bring you under the £100k threshold.
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He's usually good at being reliable so surprised if he has got this wrong.
He's used the wrong table but corrected it and pointed out that for married couples the exemption will work out higher.
Dan Neidle is great!
For those old enough to remember, how does the reaction to this Budget compare to reactions to previous Labour budgets? Particularly the first few under Blair.
He (and everyone I have read on twitter) is still actually slightly wrong on this.
I think he's correct that it's the usual nil rate bands*, plus £1m agricultural relief per spouse. However, this would only be if the first spouse to die leaves their share to their children, claiming their own nil rate bands, and their £1m agricultural relief. The surviving spouse would then use their nil rate bands and their £1m agricultural relief on their passing. It wouldn't quite work if the first spouse to die gives their share to the surviving spouse. If they were to leave their share to the surviving spouse, then that would be covered by spouse exemption, and then the surviving spouse would pass the full value to the children when they die, but although they could transfer the first spouse's NRB and TNRB, they would only have their £1m agricultural relief, not theirs and their spouses (source). But if they do it correct, then between them a couple could potentially leave £3m free of IHT. However, this method might not be possible - if assets are owned as joint tenants, rather than tenants in common - the former would mean the assets pass by survivorship to the surviving spouse regardless of what the will says. And HMRC would likely pursue that. Some wills will need to be re-written, and joint tenancies severed. It's fair to say many farmers likely won't get their affairs in order, and wouldn't be able to claim the £1m agricultural relief for each spouse. I think they might be able to adjust the will after death, but I don't know if they could change ownership from joint tenants to tenants in common after death (I guess not?). It does seem a bit unfair that unused agricultural relief can't be transferred to the surviving spouse like NRB and RNRB are - as ultimately it will just punish people who don't prepare their finances in advance, which are generally those with less income to spend on a financial advisor.
*The other thing is taper on RNRB, and I haven't seen anyone get this right. Currently, everyone is entitled to £325k NRB, plus upto £175k RNRB. However, the RNRB is impacted by the taper threshold. This has been £2m for years. So, if an estate is over £2m before exemptions, then they lose RNRB to the tune of £1 for every £2 over £2m. Therefore, if a single farmer has a farm worth £2.1m, then he wouldn't have 325k NRB + 175k RNRB + 1m agricultural relief, they would only have 325k NRB + 125k RNRB + 1m agricultural relief. Interestingly though, the taper threshold is due to increase from 27/28 onwards.
If a couple own a £5m farm, as joint tenants, and the surviving spouse inherits from the passing spouse first, then they will only have 325k NRB + 325k TNRB + 1m agricultural relief, completely losing the RNRB and the 2nd 1m agricultural relief, resulting in a £670k tax bill (assuming no change in thresholds between first and second death). If instead, the farm is owned as tenants in common and the first spouse leaves their £2.5m share to their children, then they will have 325k NRB + 1m agricultural relief, but no TNRB, resulting in a 235k tax bill on the passing of the first spouse, and the surviving spouse would then have the same reliefs and same tax bill (unless NRB increased between deaths or change in farm value). If the estate is £4m, then the first method would result in 650k NRB/TNRB + 1m agricultural relief (470k tax) whereas the second method, they would have 650k NRB, plus 350k RNRB + 2m agricultural relief (200k tax).
I think I should set up an estate planning business for farmers. They are the big winners here. The feckers even charge a % of the estate value in some cases. Also, the kids should just sell up, bank several million and make a much higher return than they would retaining the farm (especially if they have to pay interest on the tax bill either by paying by installments or taking out a loan to pay it off). I don't see why people are so up in arms about this, other than seemingly a conspiracy theory that this is in order for the government and/or Bill Gates to buy up all the farms and make us eat bugs.
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