BRITAIN'S government had a budget deficit of 5.2% of GDP in the last financial year and is aiming to eliminate that shortfall by 2018-2019; as a result, this week's Budget is expected to reveal a £12 billion crackdown on welfare spending. So this might seem an odd time to be announcing a cut in taxes. Or, at least, any tax breaks ought to be targeted on improving the country's appalling productivity record.
But no. The first Budget leak concerns a change to the inheritance tax laws to exempt domestic property worth less than £1m. The current limit, which covers the value of all estates (not just property), is £325,000. Estates above that are taxed at 40%. If two children, by accident of birth or geography, share a £1m estate, their cut, after tax, is £355,000 each (13 times the average annual salary). With many people now living into their 80s, the children will get this sum in their 50s, by which time they'll have had a chance to make decent provision for themselves.
This doesn't seem like the greatest...Continue reading
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