Each month we publish the best comments, emails and letters from our readers. Here are the best of August 2019
The simple reason why people dislike inheritance tax
In July, the news broke that one in four estates that pay inheritance tax is investigated by HMRC. Our star letter succinctly explains people’s disdain:
I think the reason people consider this tax to be so unfair is simply this:
Tax is collected from income while you are in work. From what is left you pay various other taxes on goods or services you purchase.
If you manage to have some left and decide to put it into savings, you pay tax on the interest (excluding Isas and the first £1,000 of interest in a year).
Having paid taxes all your life, you get clobbered again on assets left behind (above the threshold).
With property values forever increasing, more and more people are falling into this bracket.
No doubt the very rich engage accountants to minimise their tax liabilities or avoid much of it through overseas investments etc, meaning that middle Britain bears the brunt.
And as it happened, someone did indeed employ an adviser to do this:
We ended up paying an IFA about £5,000. He saved us about £20,000 compared to my initial calculations.
On the news that the Treasury minted no coppers in 2018, one reader was incredulous about people throwing money away:
I cannot understand the mentality of people throwing copper coins away. Even if not worth much, they are useful for putting in charity boxes in shops etc. Then charities benefit on a larger scale.
Another was worried about businesses taking advantage:
Scrapping copper coins would only cause price rises. I can’t see companies rounding down to the nearest 5p. Besides, people like to save 1ps and 2ps. I know I do – as many as I can until I fill my pot!
But another reader disagreed:
The idea that scrapping copper coins will cause inflation is unfounded. The Irish removed 1c and 2c coins from circulation some years ago, but all prices are still expressed to the nearest cent. Rounding to the nearest 5c only happens to the final total, and then only if payment is in cash.
Elsewhere, London mayor Sadiq Khan unveiled rent control proposals. This drew mixed responses:
I think it is a good idea – the current building policy benefits those who can afford high prices and then let them out at ridiculous rents. What we really need is more social housing.
But councils would rather let developers build expensive properties and get higher council tax receipts at the expense of people who may have to go into debt to pay private landlords.
But not everyone was convinced:
Rent control isn’t a new idea, but it is a silly idea. It adds more red tape to the rental market and will drive down prices for tenants because the mayor will ensure that rents don’t rise with house prices. Seems great for tenants but then what happens when a landlord wants to sell?
They will have to turf out the tenants because no landlord can afford to buy the property with sitting tenants thanks to artificially low rental income that will not cover the mortgage.
The landlords, who are making less cash, will also be more unlikely to invest in the home, meaning that there is a drop in the standard of accommodation. More slum housing all around.
And another shared a family member’s experience of rent control:
My grandfather owned a house where rent control meant the rent didn’t cover the costs of maintaining the property (luckily, he had no mortgage). He was stuck in that situation until the lady living there finally got too old to live alone.
Thanks to rent control she had no incentive to downsize from a three-bedroom property, at the expense of a family who could have used the space better. So no, the old rent control did not work.