I think pensioners with £1m houses should not be excluded from conversations about wealth taxes that apply to others, just because they are old.
Westminster Politics 2024-2029
- Thread starter Pexbo
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They can't enforce this. Tax liability is determined by the invoice date not the payment date.
They’re overriding the Value Added Tax Act (1994) to make it enforceable. Here’s the relevant section of the legislation:
https://assets.publishing.service.g...Schools_Draft_Legislation_-_DIGITAL.pdf#page3
Not in London. A fairly modest three bed house/flat say in a middling area can easily set you back £1m or more.
It's a fallacy that people owning these all have big stock and bond portfolios. Sure some do, but a lot don't. Loads of pensioners didn't have adequate pension savings cos personal pensions only came in late in life and women often didn't work or certainly weren't encourage to save.
A lot don't want to move out of their homes, where they have lived decades and have a spare room(s) for visiting family. Equity release is generally a heinous fee loaded product too.
having seen their ads and their literature, its where double glazing salesmen end up once theyve mastered the art of conning old people. that and selling blinds.
And parliamentary sovereignty means this is a perfectly lawful and constitutional move.
London is an extremely attractive location, within where some locations are more attractive than others, and median home price in London is 500k.
I never said that all have other assets, but that it's by far the standard. Which it is. If you look at averages, households with 1m in property will probably be worth north of 5m. A lot of variation, as I said, but having a paid off asset like that with little or nothing else is very unusual.
Most schools provisioned for this and issued invoices before July 3rd. We paid ours on July 3rd to avoid anti-forestalling measures.
Legislation says payments from 29th July onwards so they can't enforce that for anything issued and paid before that.
So really this is affecting parents who don't have the means to have paid their invoices up front. Terrible job.
If I was a school I would re-issue the invoices and charge a huge amount for the first term and a nominal amount for the other two to avoid VAT for this year.
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Yes, it effectively charges VAT on any pre-payments made following the announcement in parliament.
On your last paragraph, Dan Neidle (high profile tax expert) says that would likely be ruled as tax evasion and the school would carry the risk:
Good.
In the past 10 years the Tories used legislation to:
- Retrospectively declare lawful asylum seekers came here unlawfully
- Declare an unsafe country to be safe and direct the courts to ignore all evidence to the contrary
- Remove individuals citizenship and prevent them legally challenging it
- Directly contravene international treaties on the rights of the child
- Amend the Acts of Union when it became clear their policies breached it
- Ban any investigation into historical crimes in a part of the UK
- Deliberately breach human rights laws, and declare that the Human Rights Act does not apply to certain policy areas
- Give the security services complete civil and criminal immunity for any official acts
- Make citizenship applications for children unaffordable in practice
- Introduce voter suppression measures
I bet you VAT on private school fees is crossing the line to the judiciary, though.
Retrospective taxation isn’t a great look, but it is legal when imposed to counter tax avoidance. It even has a name: the so-called ‘Rees Rules’.
https://commonslibrary.parliament.uk/research-briefings/sn04369/
What a society we live in. “This affects me so I’d like third parties to commit fraud to help the few years it will affect me”
They're making it so it's determined by the date of delivery of the service. You can pay for this year but not future years.
There will be challenges but I don't think on those grounds. Lots of other legal complications where they either get wrapped up in court battles or they completely feck over fringe cases.
Never give up your dreams!
They're changing the rules mid school year so why shouldn't the schools do the same thing?
It doesn't affect me and I explained why above, however it will affect those parents who don't have the means to pay the fees up front.
London in its totality is an extremely attractive location to live? Large parts of it aren't and still cost a bomb and the cost of living is very high.
A large proportion of these houses were bought decades ago and handed down to people working everyday jobs. House price inflation has pushed the value of these properties to silly levels, but the occupants are not all sitting on £5m portfolios. Anyone who has lived there would know this is so way off the truth it's laughable.
If you look at estates, i.e. dead people, that should be a pretty good proxy for pensioners because people who die tend to be old.
The richer you are, generally, the less of your total worth is in property. That's the standard. Already at 2m, the average asset allocation of estates approaches 20 % property.
I have said, three or four times now, that this is an average, and that there will be huge variation on a measure like this. What I have said is that it's extremely unusual for someone with a paid off 1m property to have little or nothing else. I have no idea why you would say something like "but the occupants are not all sitting on £5m portfolios. Anyone who has lived there would know this is so way off the truth it's laughable" when not a single person in the whole world has claimed anything close to it.
Even in the short paragraph you're quoting, I specify several times not all, that it's an average, and that the variation is big. You can't possibly have missed it?
Those figures don't reflect the UK. You're approaching 5m in assets before you get to 20% property allocation and London is more heavily skewed towards property wealth simply because so many people who are millionaires got that way through property inflation.
It's literally UK figures.
Because one is a tax law. The other isn’t.
feck the schools. Absorb the costs. Anyone angry at the government is mental. The schools should be wearing the cost increases like state schools, or shutting up about it.
Cheering for public school budgets is akin to supporting Musk and his ilk. Grim.
I'm saying as an average it's way too high and simply not true. London and SE England is very distorted because of the property price inflation.Anyway, believe what you will.
I will believe the numbers the government release on this when calculating estate tax, yes, thank you very much.
Pubic school cost about 7.5k per child per year,
On a per-pupil basis the total funding to be allocated to schools for 5-16 year olds, in cash terms, in 2024-25 is £7,690, a 49% increase compared to £5,180 allocated per pupil in 2010-11.
After adjusting for inflation, funding per pupil was broadly flat between 2010-11 and 2015-16 at about £7,200 in 2023-24 prices.
It then fell by 3.9% over 2016-17 and 2017-18, but subsequently increased by 1.2% over 2018-19 and 2020-21. Since then, funding has increased by 7.9% (after adjusting for inflation) over the course of the following five years, reaching £7,570 in 2024-25 (in 2023-24 prices).
Broadly speaking, the average cost for private day schools is £4,980 per term, or £14,940 per school year.
so... £3k in tax, for the people that can afforded it and for the ones that can't - back to public school costing us £7.5K makes perfect sense.
On a per-pupil basis the total funding to be allocated to schools for 5-16 year olds, in cash terms, in 2024-25 is £7,690, a 49% increase compared to £5,180 allocated per pupil in 2010-11.
After adjusting for inflation, funding per pupil was broadly flat between 2010-11 and 2015-16 at about £7,200 in 2023-24 prices.
It then fell by 3.9% over 2016-17 and 2017-18, but subsequently increased by 1.2% over 2018-19 and 2020-21. Since then, funding has increased by 7.9% (after adjusting for inflation) over the course of the following five years, reaching £7,570 in 2024-25 (in 2023-24 prices).
Broadly speaking, the average cost for private day schools is £4,980 per term, or £14,940 per school year.
so... £3k in tax, for the people that can afforded it and for the ones that can't - back to public school costing us £7.5K makes perfect sense.
Yes that is very fair my friend.
However, I would always caution against generalisations.
Pensioners.....
The old....
The young...
Each are individuals with individual circumstances.
I am old and certainly not amongst the 20%.
But I have worked very hard all my life to provide for my family.
So have millions of others. That is what we do or should do.
And I happen to live close to Bristol where house prices are quite a bit higher than the national average.
So for example, someone who has done exactly the same as me but lives somewhere else will have lower assets than I.
But an intelligent person like you knows all of that.
According to the ONS at the £2m bracket property accounts for 41%.
It's 1m-2m, so the upper limit of 2m will be lower than 41 %, but you're right, I misread because I'm on my phone. I'll revise downward and say that an average estate with 1m in property is worth somewhere in the region of 3m.
From here https://www.gov.uk/government/stati...-statistics-commentary#composition-of-estates
Edit: average net estate value in the 1m-2m band is right below 1.3m, which means the average net property value is around 525k.
For the 2m+ group, average net estate value is around 4m with 1m in property.
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A bracket of £2million plus with no upper limit is going to include a stretch from the wealthiest that will distort the figures.
https://www.ons.gov.uk/peoplepopula...otalwealthingreatbritain/april2018tomarch2020
https://www.ons.gov.uk/peoplepopula...otalwealthingreatbritain/april2018tomarch2020
Hope you're spending that 5million wisely. There is no 20%.
Have been trying to stay out of this thread but having read the last few pages - the inability to understand data by some posters is astounding.
The problem is that their opinions are formed by this.
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That's the only thing, it isn't law. They're making a new law for it.
Yes surely that does make sense? How many kids do you think will leave private schools for this? It’ll be barely any.
You’re all quoting meaningless numbers. Pissing around discussing UK citizens that are worth £1m in assets or have houses worth £750-1.25m is insane.
Those folks are not the problem under the same banner.
I have a friend who lost both their parents before they were 40. Their parents were divorced and had both bought homes. They got the cash. Immediately bought 6 apartments that they rent out.
Imagine that they had been incentivised to invest that money in social housing developments with guaranteed government long term returns. Or offer them tax relief. Or give them £XXk of stamp duty immunity for 10 years.
Rework the gearing to make investing in society more beneficial than helping it burn. They can self enrich but not at the expense of 6 fecking homes.
It’s all insane. We are rolling up huge swathes of people, adding a financial number to it, and treating them the same.
Tax the feck out of the genuine wealth. But work out a way to keep working class boomer wealth inside the parts of society that generated it. They would welcome it. They want it.
These blanket taxation systems are insane and we can do so much better. Some people have a form of asset wealth while their wider family is dirt poor. Let them give away £500k to 5 direct relatives untaxed if they bequeath £100k to a local Hospice/Library/School.
We need to think bigger and are drowning in noise.
Those folks are not the problem under the same banner.
I have a friend who lost both their parents before they were 40. Their parents were divorced and had both bought homes. They got the cash. Immediately bought 6 apartments that they rent out.
Imagine that they had been incentivised to invest that money in social housing developments with guaranteed government long term returns. Or offer them tax relief. Or give them £XXk of stamp duty immunity for 10 years.
Rework the gearing to make investing in society more beneficial than helping it burn. They can self enrich but not at the expense of 6 fecking homes.
It’s all insane. We are rolling up huge swathes of people, adding a financial number to it, and treating them the same.
Tax the feck out of the genuine wealth. But work out a way to keep working class boomer wealth inside the parts of society that generated it. They would welcome it. They want it.
These blanket taxation systems are insane and we can do so much better. Some people have a form of asset wealth while their wider family is dirt poor. Let them give away £500k to 5 direct relatives untaxed if they bequeath £100k to a local Hospice/Library/School.
We need to think bigger and are drowning in noise.
That… makes it a law?…….
Laws are supposed to be fair. Bringing a law to backdate tax affairs isn't exactly fair when people and businesses would have budgeted according to the rules at the time of conducting business.
This is why there will be challenges and a lot of this will be tied up in court for a while which will likely make the government backtrack and only issue it for following year...
Honestly mate I just don’t care. It reads fair to me. And also, laws are fair but taxation is deliberately unfair. Breaking taxation law is a crime. I hope that any school that tries to do a shifty thing for parents, gets punished, along with the parents.
You can't break a law that isn't even a law yet
Watch this space anyway, schools will come out on top.
Do you know many, I know three.
One is a business owner and one is a single mum - one will find it harder than the other.
You can't break a law that isn't even a law yet
Watch this space anyway, schools will come out on top.
I think you mean ‘Some elitist schools might get to keep some money’ (they won’t)
‘Schools’ haven’t came out on top for well over a decade.
I know 2 families whom are each taking 3 kids out of our school.That's six pupils lost to this malarkey from one relatively small school.
There will be thousands more because that will include parents who might have been considering continuing private secondary education for their kids who will now opt for grammar schools.
Your view of private schools is in fact elitist. The majority of them are full of children from middle classes and have fees which are on par with nursery costs for the region.
There's then also a minority of elitist schools that only accept your first born as payment which you're thinking of in your narrow minded view, and neither them or their pupils will be affected by this policy.
In fact they'll end up raiding the government VAT coffers by making large investments in their infrastructure.
Erm, no.
“Full of children from middle classes”
“Have fees comparable to Nurseries”
That’s exactly what I’m happy to break. They are evidence of a broken social contract.
If you like them, great. I don’t. They shouldn’t exist.