The Lemon Fool

Looking at the Greens taxes they want to raise money from a 1% wealth tax on UK £10m+ millionaires and 2% on Billionaires. Google doesnt really help, but how many of those do we have.

Apparently we had 17 Billionaires in 2020 but that figure, along with millionaires has fallen this year apparently according to one article but it didnt explain why. Were they getting poorer or moving elsewhere.

Where are the facts

Can't imagine it adds up, any more than the main parties' tax-and-spend promises.

There are various other considerations here. Non-doms like Lord Ashcroft. Opaque offshore family trusts. Numbers falling into such a net could doubtless be influenced by changing the rules on those matters.

That might prove hard if the super-rich have the ear of Sir Humphrey (and why wouldn't they?), and of course any party in government is likely to benefit from donations with the threat of those drying up if you tax the donors. So party funding rules are probably also relevant.

"Millionaires are abandoning the UK in droves, new research shows"

https://www.cnbc.com/2024/06/18/million ... shows.html

Actually adds Brexit as part of the mix.

I assume that such estimates of HNWIs are significantly influenced by the disclosures of those individuals themselves, given that wealth does not have to be officially reported other than upon divorce or death and probate.

And with all this talk of "taxing the rich" it would seem prudent for the folks potentially affected by that to play down their wealth, and make only modest statements about its extent, location and so on.

For the UK the coming few years look like they could be the most hostile environment for HNWIs since the 1970s. Quite why we wish to drive them away is beyond me, but it fits with the image of the UK as a second-rate formerly prosperous nation that is locked into decline and mediocrity

Lootman wrote:I assume that such estimates of HNWIs are significantly influenced by the disclosures of those individuals themselves, given that wealth does not have to be officially reported other than upon divorce or death and probate.

And with all this talk of "taxing the rich" it would seem prudent for the folks potentially affected by that to play down their wealth, and make only modest statements about its extent, location and so on.

For the UK the coming few years look like they could be the most hostile environment for HNWIs since the 1970s. Quite why we wish to drive them away is beyond me, but it fits with the image of the UK as a second-rate formerly prosperous nation that is locked into decline and mediocrity

On that point, it's suggested on CNBC that c9000 "millionaires" will leave the UK during 2024, double the amount of '23.

https://www.cnbc.com/2024/06/18/million ... shows.html

"Millionaires are abandoning the UK in droves, new research shows"

Given that anyone who has more than £1000 is apparently not a working person, usually defined as "tool maker", then it's very likely to burden will fall on savers, the skilled working (that used to include tool makers) and middle classes.

Taxing saves will not help the UK's productivity issues.

Still there's a good chance some of the millionaires will be replaced, and not just with civil servant and public secotr workers, by those lucky enough to make money off the increased inefficient public spending.

It's not just "how much" (wealth) but "how" (it is invested). There are assets held that are outside of (current) taxation - eg ISAs (43%) or very nearly outside of taxation (low coupon Gilts) - in the case of the latter, the wheel barrow might have been loaded up last year.


Source : https://www.resolutionfoundation.org/ap ... bution.pdf

monabri wrote:It's not just "how much" (wealth) but "how" (it is invested). There are assets held that are outside of (current) taxation - eg ISAs (43%) or very nearly outside of taxation (low coupon Gilts) - in the case of the latter, the wheel barrow might have been loaded up last year.


Source : https://www.resolutionfoundation.org/ap ... bution.pdf

Very odd classification, and it seems to exclude most families' biggest three assets: the pension, the house, and the entitlements (the latter including state pension entitlement, which alone is likely to be worth more than any other asset in lower-house-price parts of the country)!

Gerry557 wrote:Looking at the Greens taxes they want to raise money from a 1% wealth tax on UK £10m+ millionaires and 2% on Billionaires. Google doesnt really help, but how many of those do we have.

Apparently we had 17 Billionaires in 2020 but that figure, along with millionaires has fallen this year apparently according to one article but it didnt explain why. Were they getting poorer or moving elsewhere.

Where are the facts

And of course the Greens will say "don't worry about this, it's only 1% for most of you".

Just like we were told about Insurance Premium Tax. "Its only 1%" the chancellor said. Look at it now. 12%.

Wealth tax will go the same way I predict, if we let the principle get established.

Mike4 wrote:

Gerry557 wrote:Looking at the Greens taxes they want to raise money from a 1% wealth tax on UK £10m+ millionaires and 2% on Billionaires. Google doesnt really help, but how many of those do we have.

Apparently we had 17 Billionaires in 2020 but that figure, along with millionaires has fallen this year apparently according to one article but it didnt explain why. Were they getting poorer or moving elsewhere.

Where are the facts

And of course the Greens will say "don't worry about this, it's only 1% for most of you".

Just like we were told about Insurance Premium Tax. "Its only 1%" the chancellor said. Look at it now. 12%.

Wealth tax will go the same way I predict, if we let the principle get established.

You can speculate based purely on your own thoughts.

Or you could look at countries that actually have wealth taxes. Have the rich fled Switzerland, which has the highest wealth tax?

Mike4 wrote:And of course the Greens will say "don't worry about this, it's only 1% for most of you".

Just like we were told about Insurance Premium Tax. "Its only 1%" the chancellor said. Look at it now. 12%.

Wealth tax will go the same way I predict, if we let the principle get established.

Same with income tax and inheritance tax, both of which were introduced "only for the wealthy", and look at them now.

That is why we should oppose new taxes even more than increases in existing taxes. They start small and become monsters.

Also a wealth tax will take a lot of upfront investment, to start tracking such things which currently are not tracked. And once that is in place, then "why not use it more?" will be the cry. It will be too hard for politicians to resist lowering the threshold to 5 million, then 1 million, and soon half the population is paying it.

Lootman wrote:Also a wealth tax will take a lot of upfront investment, to start tracking such things which currently are not tracked. And once that is in place, then "why not use it more?" will be the cry. It will be too hard for politicians to resist lowering the threshold to 5 million, then 1 million, and soon half the population is paying it.

WIll it?

All Spain did was introduce another form which you had to declare your worldwide assets on.

Now sure, some will choose to accidentally forget certain things etc but I don't think it has the potential to be a bureaucratic nightmare.

You declare the assets and note the allowances and pay an amount accordingly. I suspect cross refencing SA returns with the "Wealth Return" would produce a reasonable data set of people to look at to start with where the 2 forms don't necessarily stack up.

But I say all that, totally on the same page as you in that a wealth tax is not a progressive instrument and not something I would wish to see introduced.

the0ni0nking wrote:

Lootman wrote:Also a wealth tax will take a lot of upfront investment, to start tracking such things which currently are not tracked. And once that is in place, then "why not use it more?" will be the cry. It will be too hard for politicians to resist lowering the threshold to 5 million, then 1 million, and soon half the population is paying it.

WIll it? All Spain did was introduce another form which you had to declare your worldwide assets on.

Yes that part is easy. But how would the government validate that as currently only income needs to be reported, not assets?

So if I own a 5 million house in Spain (and do not rent it out) then I will have never disclosed that. Likewise a foreign bank account with 10 million in it that does not pay interest. A few million in gold in my safe deposit bank. Or some valuable art.

Even having to disclose things like that might drive people to become non-resident.

the0ni0nking wrote:All Spain did was introduce another form which you had to declare your worldwide assets on.

And to get a measure of the degree to which our UK government usually over-complicates things, how big is the Spain tax handbook compared to the tax handbook in the UK? One tenth the size of ours, at a wild guess....

Lootman wrote:Yes that part is easy. But how would the government validate that as currently only income needs to be reported, not assets?

So if I own a 5 million house in Spain (and do not rent it out) then I will have never disclosed that. Likewise a foreign bank account with 10 million in it that does not pay interest. A few million in gold in my safe deposit bank. Or some valuable art.

Even having to disclose things like that might drive people to become non-resident.

Appreciate this is DAK and we've already drifted way off topic so suspect the topic likely needs to move if we're to continue the debate but using your example:

If you owned the Spanish house directly, then I'd be surprised if information sharing between HMRC and Agencia Tributaria doesn't catch you out - because you will have to do a Spanish tax return to reflect the fact you don't rent it out on a specific non-resident form (if you don't do that, they could catch you because you genuinely can't avoid IBI [Council Tax] and they will also know you're not on the Padron and so non-resident that way if you don't complete the non-resident tax return.

Of course, a property is difficult to hide - but artworks and other move-able items would I suspect make it easier to avoid - the example of having some tonnes of gold in your underground vault is probably a better example.

& then it probably comes down to integrity - or, if you're not happy with what the govt has imposed, you simply chose to leave and take your wealth with you.

Mike4 wrote:And to get a measure of the degree to which our UK government usually over-complicates things, how big is the Spain tax handbook compared to the tax handbook in the UK? One tenth the size of ours, at a wild guess....

If you fancy some bedtime reading on Spanish tax then here you go :

https://sede.agenciatributaria.gob.es/S ... ticos.html

I do suspect their overall manual is probably smaller - plus there situation is not helped by each of the autonomous communities having an element of freedom over certain tax rates/allowances.

So as an example, Andalusia doesn't have a wealth tax (well, I think it does but it's just set at 0%) whereas Valencia does. Similarly, there are elements of income tax set at autonomous community level in additional to the national rate - in that regard it's similar to Switzerland where there is the federal rates and then individual canton rates as well.

the0ni0nking wrote:

Mike4 wrote:And to get a measure of the degree to which our UK government usually over-complicates things, how big is the Spain tax handbook compared to the tax handbook in the UK? One tenth the size of ours, at a wild guess....

If you fancy some bedtime reading on Spanish tax then here you go :

https://sede.agenciatributaria.gob.es/S ... ticos.html

I do suspect their overall manual is probably smaller - plus there situation is not helped by each of the autonomous communities having an element of freedom over certain tax rates/allowances.

So as an example, Andalusia doesn't have a wealth tax (well, I think it does but it's just set at 0%) whereas Valencia does. Similarly, there are elements of income tax set at autonomous community level in additional to the national rate - in that regard it's similar to Switzerland where there is the federal rates and then individual canton rates as well.

My bedtime reading is currently the "British Gliding Association Student Pilot Manual". But thank you all the same!

Mike4 wrote:

the0ni0nking wrote:
If you fancy some bedtime reading on Spanish tax then here you go :

https://sede.agenciatributaria.gob.es/S ... ticos.html

I do suspect their overall manual is probably smaller - plus there situation is not helped by each of the autonomous communities having an element of freedom over certain tax rates/allowances.

So as an example, Andalusia doesn't have a wealth tax (well, I think it does but it's just set at 0%) whereas Valencia does. Similarly, there are elements of income tax set at autonomous community level in additional to the national rate - in that regard it's similar to Switzerland where there is the federal rates and then individual canton rates as well.

My bedtime reading is currently the "British Gliding Association Student Pilot Manual". But thank you all the same!

Does that manual indulge itself in flights of fancy - or is it more down to earth?

Watis

Watis wrote:

Mike4 wrote:
My bedtime reading is currently the "British Gliding Association Student Pilot Manual". But thank you all the same!

Does that manual indulge itself in flights of fancy - or is it more down to earth?

Watis

You and your high flying puns. I think you're just winging it!

I see it presented as a nice idea on electioneering, but fraught to implement.
How does one value pensions, house prices, for example. Do insurance/pension companies have to produce specific valuations on a specific date for the equivalent of wealth tax self assessment forms.
I occasionally stick the thought at the back of my mind of decamping to the Isle of Man (which is visible from the top of nearby hills on a clear day!), given the lack of IHT (I am single, have no children, and will exceed the £325k NRB), and if a wealth tax appears, it will make it more than just a thought at the back of my mind. This will push the tax burden even more onto those that remain. Seems to be counterproductive ...

yorkshirelad1 wrote:I see it presented as a nice idea on electioneering, but fraught to implement. How does one value pensions, house prices, for example. Do insurance/pension companies have to produce specific valuations on a specific date for the equivalent of wealth tax self assessment forms.

It is potentially a lot of work for a tax that only affects a small number of people. Has any tax ever targeted a constituency of less than 20 people, in the way that the Greens 2% wealth tax is slated to do? Insanity. Luckily it is only the irrelevant Greens who are proposing such a tax.

One obvious reaction to such a tax would be a renewed interest in stores of value that are anonymous, as well as portable. Gold, diamonds, art, collectibles and other tangibles can all be owned without any third party knowing, and can be relocated fairly easily as well. Why would any government enact policies that drive wealth to be held in such dark and secluded places?