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disenfranchised

BOMAD and IHT avoidance go horribly wrong for property millionaire

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This article reports on an extreme case but the UKGov's policy to shift wealth and power out of the hands of the young and into the hands of the older property owning cohort is causing similar tensions in families right across the country and all social classes.  I know 40 somethings in living in miserable conditions but they keep going only in the hope/expectation that they will inherit some of their parent's vast property wealth (or grandparent's).  The wealth imbalance between the generations is so stark that tension is inevitable and fighting amongst siblings over the spoils common. 

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9 minutes ago, Wayward said:

This article reports on an extreme case but the UKGov's policy to shift wealth and power out of the hands of the young and into the hands of the older property owning cohort is causing similar tensions in families right across the country and all social classes.  I know 40 somethings in living in miserable conditions but they keep going only in the hope/expectation that they will inherit some of their parent's vast property wealth (or grandparent's).  The wealth imbalance between the generations is so stark that tension is inevitable and fighting amongst siblings over the spoils common. 

People with these expectations are often the idiots who can't bring themselves to admit that HPI is out of control and a negative thing because they can't stop thinking about the house they will inherit and its value.

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15 minutes ago, btl_hater said:

People with these expectations are often the idiots who can't bring themselves to admit that HPI is out of control and a negative thing because they can't stop thinking about the house they will inherit and its value.

Problem is people in their 50s die all the time and people quite often live until their 80s/90s

You life can literally come and go whilst waiting for that windfall.

It always amazes me when they say the first time buyer is in their 30's and 40's in London thats peak earnings/past peak health paying peak price.....statistically downhill from there.

 

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On 25/07/2018 at 23:21, disenfranchised said:

'As with so much else, Manny put the house in his children's names. 'We could never have guessed that Lyegrove, our pride and joy, would become the focal point of the rift,' says Brigitta. 'I still walk around that house in my mind.''

'The couple had retired to a rented flat in Monaco, expecting to use the Cote D'Azur villa and their home in England.'

'Yet Gerald's relationship with Manny was growing increasingly strained and, according to Brigitta, he started behaving as though he were the proprietor of Lyegrove.'

'proprietor

noun

noun: proprietor; plural noun: proprietors

the owner of a business, or a holder of property.'

 

The headline should be  - Tax avoiding couple want it both ways.

 

 

Edited by spyguy

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They never learn, it's happened before and will happen again.

https://www.standard.co.uk/news/meet-mr-and-mrs-linley-also-known-as-the-glumleys-6631881.html

  • In 1998, he sold Les Jolies Eaux, his mother's former home on Mustique. It was the only property she ever owned and, although the land was a gift from her friend, Lord Glenconner, she paid for the building herself. 

    Mustique was where some of her happiest days were spent, and she had made it over to her son in 1990 as part of a deliberate and utterly proper process of disposing of assets to prevent the Inland Revenue from taking any more in death duties than necessary. 

    To her dismay, once the seven years had elapsed to escape inheritance tax, Linley got rid of it for £1.5million. 

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A sad story.

As Krishnamurti pointed out, money becomes a problem when you have either too little or too much.

The ever present great mysteries of consciousness, suffering, love, death etc. await our attention and exploration yet so many spend almost all their precious time and energy accumulating 'wealth' far beyond any rational need.

This has been likened to scrabbling around in a dark, dirty cellar collecting a pile of useless junk while above there is light and freedom.

We now recognize all sorts of addictions, and I would add pathological wealth addiction to that list.

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IHT is a bad tax, and I say that as someone who stands to inherit very little. It's basically a tax on biology.

Bad taxes give imperfect humans reasons to do stupid and evil things.

Abolish IHT, stamp duty and council tax and replace with a single land value tax. Gradually crank national insurance and VAT down to zero and LVT up to compensate. Get rid of the bad taxes. The nation will become a saner, simpler and happier place.

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Pathological wealth addiction?   Maybe that's an excuse some can give to the BTLers, IF more of them are found out in time to come. 

"It's not their fault you tenants, look at those glum faces of the BTL landlords; think of your landlords who just were addicted to buying more homes to rent out, and weren't capable of thinking, and join us in blaming the banks."

At the end of things we have to take ownership for our own choices in life.   PWA? 

 Flying back from Monaco?  Other stories of security guard denying the mother access; if it's for sale then good.  I doubt their kids are baddies.  Maybe the house can be sold to a family.    Maybe they have a different view to their parents and don't like to see housing underused. 

And if your kids are so important to you, then stop putting big old house you don't live in, all the paintings and jewels (other articles) before their own choices.   Make peace.  That's a theme in the article where I can understand why the kids may have an issue with parents.  Parents are still going to be super wealthy no matter what.

There are many happy smiling ear-to-ear rich people who don't lose their bearings and their offspring stable and happy. All different.   You have one life and you have to try and be happy.  What you do to be happy doesn't mean everyone else is doing it wrong, they are simply making their own choices, and some have great fulfilling happy lives, and sometimes others might get found out.  Although many tenants don't have a choice in matters given house prices.

Quote

Born in London in 1931, Manny escaped death after the family home in Willesden, North-West London, burned to the ground during the Blitz. After a stint in the RAF, he joined forces with his father, buying and refurbishing properties.

-In a rare interview in 2001, Manny said: ‘I don’t like buying property, doing it up, selling it on, then paying more for the next one. My philosophy has always been to hold on to as much property as I can.’

http://www.dailymail.co.uk/news/article-3157651/We-banned-home-children-gave-600m-Tempted-kids-save-inheritance-tax-Read-think-again.html

-Manny Davidson, 84, said that Lyegrove House, the 18-acre Jacobean estate where he and his wife lived for two decades after buying it in 1993, had been put up for sale for £12 million against his will by his son Gerald and daughter Maxine.

-Last month Mr Davidson’s wife, Brigitta, flew back from Monaco, where the couple have lived since 2013, for a final look at the stately home. She was told that she could not enter the grounds on her children’s orders.

July 2015 https://www.thetimes.co.uk/article/tycoon-loses-pound12m-home-trying-to-avoid-tax-cd9tlnrxj23

 

Edited by Mossie

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2 hours ago, Dorkins said:

IHT is a bad tax, and I say that as someone who stands to inherit very little. It's basically a tax on biology.

Bad taxes give imperfect humans reasons to do stupid and evil things.

Abolish IHT, stamp duty and council tax and replace with a single land value tax. Gradually crank national insurance and VAT down to zero and LVT up to compensate. Get rid of the bad taxes. The nation will become a saner, simpler and happier place.

Sweden, still popularly supposed by many to be a socialist Utopia, has done away with IHT altogether. 

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2 hours ago, Dorkins said:

IHT is a bad tax, and I say that as someone who stands to inherit very little. It's basically a tax on biology.

Bad taxes give imperfect humans reasons to do stupid and evil things.

Abolish IHT, stamp duty and council tax and replace with a single land value tax. Gradually crank national insurance and VAT down to zero and LVT up to compensate. Get rid of the bad taxes. The nation will become a saner, simpler and happier place.

Can't they just deal with the loop holes..?  I like the idea of IHT...it encourages philanthropy and helps to limit the creation of aristocratic classes and wealth inequality.  HPI creates wealth inequality - IHT would limit this.

The Conservative Party policy of increasing to £1m family home exemption from IHT to my mind seeks to remove the limitation to growth in wealth inequality.

“There is no point more difficult to account for than the right we conceive men to have to dispose of their goods after death.”Adam Smith

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2 hours ago, Dorkins said:

IHT is a bad tax, and I say that as someone who stands to inherit very little. It's basically a tax on biology.

Bad taxes give imperfect humans reasons to do stupid and evil things.

Abolish IHT, stamp duty and council tax and replace with a single land value tax. Gradually crank national insurance and VAT down to zero and LVT up to compensate. Get rid of the bad taxes. The nation will become a saner, simpler and happier place.

Sounds good, but won't work.

If you were to replace all those taxes, the average homeowner would probably have a £10k+ a year land tax to compensate for lost revenue. You would go from one extreme (too many incentives to own a home) to the other. Most of the land in the country would become worthless overnight as rent wouldn't even cover the tax. 

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10 minutes ago, Wayward said:

Can't they just deal with the loop holes..?  I like the idea of IHT...it encourages philanthropy and helps to limit the creation of aristocratic classes and wealth inequality

LVT is how you deal with the loopholes.

Edited by Dorkins

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11 minutes ago, NuBrit said:

Sounds good, but won't work.

If you were to replace all those taxes, the average homeowner would probably have a £10k+ a year land tax to compensate for lost revenue. You would go from one extreme (too many incentives to own a home) to the other. Most of the land in the country would become worthless overnight as rent wouldn't even cover the tax. 

You're catastrophising without calculating. £10k per year per residential property would be revenue of £350bn. That's approaching double what IHT+SDLT+CT+NI+VAT currently raise. It also ignores the fact that 95% of the land in the UK is not residential property.

Edited by Dorkins

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National insurance tax receipts alone are £137b. If there are 46m adults in the UK, then that is £3k per person alone that would need to be found from the land value tax. When you consider that 40-50% of the population don't own homes, it is easy to see how the land tax would have to be astronomical. 

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1 minute ago, NuBrit said:

National insurance tax receipts alone are £137b. If there are 46m adults in the UK, then that is £3k per person alone that would need to be found from the land value tax. When you consider that 40-50% of the population don't own homes, it is easy to see how the land tax would have to be astronomical. 

I think you are falling into the trap of equating council tax with land value tax. 95% of the land in the UK is not residential property.

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8 minutes ago, NuBrit said:

it is easy to see how the land tax would have to be astronomical. 

What's wrong with the land tax being astronomical? National insurance and VAT are astronomical. The idea is to replace astronomical taxes that are mostly raised on the poorer end of society with astronomical taxes that are mostly raised on the richer end of society. Where would the landed rich move their land to?

Edited by Dorkins

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8 minutes ago, Dorkins said:

I think you are falling into the trap of equating council tax with land value tax. 95% of the land in the UK is not residential property.

If you were to exempt the 95% of people who are ordinary home owners, then the sums levied would truly be astronomical. If you were to put most of the taxation burden on the landowners of this country, the majority of them would have to sell their land as they are generally not cash rich and the yield from agriculture would come nowhere close to even meeting the tax. In that scenario, you'd have a glut of landowners selling, crashing the price of land. Because the value of the land would have collapsed, your taxation base would collapse.

Some taxes in this country are incredibly silly (stamp duty is about the worst one) and should be abolished. I even think a land tax is a good idea, but I don't see how it could ever replace all the taxes you are suggesting it could.

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5 hours ago, The Spaniard said:

A sad story.

As Krishnamurti pointed out, money becomes a problem when you have either too little or too much.

The ever present great mysteries of consciousness, suffering, love, death etc. await our attention and exploration yet so many spend almost all their precious time and energy accumulating 'wealth' far beyond any rational need.

This has been likened to scrabbling around in a dark, dirty cellar collecting a pile of useless junk while above there is light and freedom.

We now recognize all sorts of addictions, and I would add pathological wealth addiction to that list.

Absolutely.....fear, the fear of loss.....a huge contribution to anxiety.....the more you have the more you risk losing, have to insure, care for it and worry about it......ownership and gain brings with it responsibility, responsibility does not always bring with it freedom nor choice......addictions control you, you do not control an addiction.;)

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18 minutes ago, NuBrit said:

If you were to exempt the 95% of people who are ordinary home owners, then the sums levied would truly be astronomical. If you were to put most of the taxation burden on the landowners of this country, the majority of them would have to sell their land as they are generally not cash rich and the yield from agriculture would come nowhere close to even meeting the tax. In that scenario, you'd have a glut of landowners selling, crashing the price of land. Because the value of the land would have collapsed, your taxation base would collapse.

Some taxes in this country are incredibly silly (stamp duty is about the worst one) and should be abolished. I even think a land tax is a good idea, but I don't see how it could ever replace all the taxes you are suggesting it could.

This is an emotional response. Most farmers are tenants. Tenants pay rents. Rents can be taxed. Instead of 100% of the rent going to some Norman descendant landowner sat on his backside, that rent can be split between the landowner and the state.

I love the idea that the UK's landowners can't afford to pay taxes despite holding the vast majority of the wealth. They've programmed you well.

Edited by Dorkins

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21 minutes ago, Dorkins said:

This is an emotional response. Most farmers are tenants. Tenants pay rents. Rents can be taxed. Instead of 100% of the rent going to some Norman descendant landowner sat on his backside, that rent can be split between the landowner and the state.

I love the idea that the UK's landowners can't afford to pay taxes despite holding the vast majority of the wealth. They've programmed you well.

The value of UK land is about £5t (trillion with a t). To make the sort of tax revenue that would compensate for the tax cuts you want, you would probably have to impose a 5% flat tax on that, yielding £250b (at current land values). Sounds great, but UK land only generates a 1% yield of £50b on the value if rented (Savills do a land report that is somewhere on the internet). At current values, that would mean UK land would generate a negative yield of 4% under the new tax regime. That is clearly not economical, so the value of the land would have to decline drastically. To generate that historical 1% yield, the value of the land would need to come down to about £750b, generating the same £50b rental income, then subtracting out the 5% land tax, which would only now yield just £37.5b.

You can collapse the land values with this approach, but you also collapse the tax base.

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Just now, NuBrit said:

UK land only generates a 1% yield of £50b

I don't think so. Even just in the 40% of residential property that is let, renters paid £52bn:

https://www.theguardian.com/money/2018/feb/12/uk-tenants-paid-record-50bn-in-rents-in-2017

Multiply that up by the fact that many social rents are below market value and the owner occupied part of residential property and you're easily past £150bn. Now add in commercial rents (real and imputed) and the 95% of land that is not urban.

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5 minutes ago, Dorkins said:

I don't think so. Even just in the 40% of residential property that is let, renters paid £52bn:

https://www.theguardian.com/money/2018/feb/12/uk-tenants-paid-record-50bn-in-rents-in-2017

Multiply that up by the fact that many social rents are below market value and the owner occupied part of residential property and you're easily past £150bn. Now add in commercial rents (real and imputed) and the 95% of land that is not urban.

I thought we weren't considering residential?

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11 minutes ago, NuBrit said:

I thought we weren't considering residential?

I think there has been a miscommunication. In my opinion all land should be subject to land value tax.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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