The OBR in March, reviewing its budget forecasts, quietly cut its forecast for capital or wealth taxes by £2.8 bn for 2025-6. It slashed £5 bn off the forecast for 2028-9, an 18% fall to a £23 bn total. Capital taxes are Inheritance tax, capital gains tax and Stamp duties. So much for Labours plan to soak the rich to pay for everything.
The government has to learn that energetic entrepreneurial people and people who have worked hard and built up their savings do not need to stay here to pay extra taxes on their efforts. Indeed they are leaving in their droves for lower taxes and sunnier climes. We are not just losing the ultra rich, the Non Doms driven out by the abolition of the right to just pay here on their wealth and earnings here. We are losing the modestly affluent, retiring abroad, and young strivers who want to set up a business or get a well paid job somewhere where they can keep more of the reward.
It is also the case that those with savings and wealth who do stay decide to pay less capital tax as the rates go up.People with second homes bought a long tine ago do not feel able to swap them for a more appropriate sized or located property because the CGT and Stamp Duty is crippling. Housing becomes less well adjusted to needs as a result. People with shares bought a long tine ago, or tec shares bought well more recently sit on large capital gains. They are not going to switch the capital into something new or better if they face a big tax bill to do so. Capital is less well allocated and the government loses out on Stamp duty on switching assets.
Jealousy is a bad basis for public policy. The notion that there enough rich people to stay and pay even more of the tax to cover a spendthrift government has always proved wrong. 1970 s UK had the brain drain with sky high tax rates. The Labour government had to borrow from the IMF and cut public spending as tax revenues disappointed. Cuba and Venezuela impoverished themselves by blaming the rich.
June 14, 2025
Good morning.
They may just swerve it this time. Labour have hit on the biggest cash-cow, the private pension funds.
I have long argued that, Socialism can only work when someone else can pay for its largess. They problem for them though, is that to get re-elected, they have to make more and more spending promises. So over time they will go back to the pension funds and take more and more until they go bust. That is why I have been highlighting this over the last few articles. The pension funds invest in a wide range of areas and, if they start to lose money the whole economy will implode. Labour have embarked on a dangerous course of action that few here and elsewhere have fully realised.
You heard it here first.
June 14, 2025
Agree Mark B
They want your money to spend, re distribute, waste, and they intend to get it any way they can.
June 14, 2025
Having lost my wife recently I’m very cash and property rich for my age (80). Rather than pay large sums to the government on my final denise, I intend to remove as much equity as possible and have a spending spree on me and my family. There is no way my lifetime endeavours are going to be peed against the wall by this incontinent government
June 14, 2025
Ian
I think many of us feel exactly the same way.
My/our intentions as well, and most of it it will not benefit the UK economy, probably luxury German cars, lots of holidays and cruises abroad (usually America owned)
All investments taken from the Stock market, which Reeves wants to promote.
As I have said many times before,They do not understand Human nature.
June 14, 2025
Ian
Sorry for your loss.
Both my elderly next door neighbours have passed away recently. The government is due a nice payout plus, a reduction in healthcare and social costs.
June 15, 2025
Indeed do not forget as many do that you can also make regular gifts out of surplus income without the 7 years wait. Or you can sell up and move assets all overseas. Then your beneficiaries might not even need to obtain probate in the UK. Investment in trading companies, farms..l can help but only 20% saving now thanks to Robber Reeves!
How the Exemption for Gifts out of Surplus Income Works
In order for a gift to be exempt as a gift out of surplus income, the following conditions must be satisfied:
The gift must be part of your normal (i.e typical or habitual) expenditure; and
The gift must be made out of your after tax income taking one year with another; and
After allowing for all other transfers of value forming part of your expenditure, you are left with sufficient income, in order to maintain your usual standard of living;
In order to satisfy H M Revenue & Customs that the gifts were part of your normal expenditure, it will be necessary to show a commitment to make regular gifts as part of a settled pattern of giving.
June 15, 2025
Lifelogic
HMRC apparently have a full list of what you can and cannot assume is normal expenditure. amongst many other things expensive holidays paid from savings count as normal expenditure, so thus your surplus income headroom is restricted.
June 14, 2025
@Mark B – a dangerous course of action? or always the plan. Never forget the last team opened all the doors, they made high tax and borrowing look like child’s play. They haven’t repented and even sitting on alternative benches we note it is the same team that was part of the ‘collective responsibility’ of cabinet that kicked it off and own today’s situation. So are not in a position to complain or offer an alternative.
June 14, 2025
Who wants their pension fund to invest in Gov’t spending projects? Recipe for funds wipe-out!
June 14, 2025
This is the point – They have no choice ! It is alleged that the Chancer wants 10% of their money invested (given) in government projects. Projects with no chance of a return. Just imagine, 10% per annum wasted, year on year. ie Ever diminishing returns.
I can see it. Other may see it. But the Chancer can only see the Pound signs and to hell with the consequences.
June 16, 2025
When public sector pension funds invest in this, any financial losses resulting from poor investments, such as those incurred by local councils that invested in Icelandic banks and subsequently lost, are made up by current taxpayers. Our kids are going to go bankrupt.
June 15, 2025
Indeed!
June 14, 2025
Well not really first. The attack on pensions funds and annuity companies either taxing them or just forcing them to “invest” in low yielding government debt has been going one for years. With the Gordon Brown dividend tax raids raid and the contribution limits and lifetime caps too.
June 14, 2025
Agreed 100%. It is a problem that affects some think tanks too. The IFS staff, including it’s Director, are infected with such thinking. Indeed one advocated the elimination of IHT tax relief on AIM shares. In an IFS podcast he was supported by its Director. I wrote to him pointing out that such shares carry extra risks and needed a tax incentive to help them raise finance, just as other schemes, such EIS and VCT incentives, have been devised to encourage risk investment in even earlier stage businesses. He did not reply. I believe it was an IFS “researcher” who came up with the idea to tax farmers to extinction.
Too much UK public life and policy is driven by ignorance and envy. It is causing acute national decline. It will only be reversed if tax policies recognise that wealth creation involves risk as well as reward.
June 14, 2025
Indeed but Tories started to attack non doms, refused to take a Brexit dividend in the form of lower VAT, Corporation Tax, indeed Sunak signed up to the international treaty putting a legal floor on it. They ignored the example of Ireland and disowned the opportunity to create a Singapore style economy presumably after pressure from the EC and their own centrists.
They turned into a tax and spend party.
Keynesian’s have captured the ‘world’
June 14, 2025
@NigL +1 agree with you there. I personally think it goes further back than that, Blair started the destruction and everyone since has added their ‘twopenn’orth’. There has never been any push back, it has been political terrorism at its worst
June 14, 2025
At a political level there is no one with the courage, economic heft and communication skills to push back against the knee jerk cries from the Left about giving more money to the rich and austerity.
So nothing will change until a true visionary figure emerges (thatcher/Lawson)
June 14, 2025
The true visionary would have to deliver the blunt truth as well, which doesn’t work with an electorate that votes for sweet lies.
June 14, 2025
Could not agree more with your Posting today John.
It would appear that anyone with a net worth of over £1,000,000 (for a Couple) is now regarded as wealthy, and a target. For single people with no Children is is simply £325,000
Not difficult if you live and own a home in a reasonably nice area, especially in the south, or near to London where you have to pay well over £500,000 to get a 3 bedroom semi, or a 1 bedroom flat in London, add to that your Pension Fund (now subject to IHT on its unspent amount) if you are over 75 years of age, perhaps some savings, perhaps some shares in a business, and all of the rest or your worldly goods, and you qualify for payment of IHT at 40% big time.
Add in the 7 year rule on gifting away any of your own money, which would include paying your Grand Childrens University fees, and they could also be subject to a tax raid within 7 years as well !
Governments have really lost the plot in our Country now. They say they want to encourage work, investment and savings so people can be self sufficient, but then tax them for doing so, no wonder the Benefits bill is out of control, as many people now say what is the point of trying to better myself, when the Government take the largest share of my success.
No wonder growth is now difficult to achieve.
I do however see that a new industry is now becoming more apparent, with many more financial management organisations springing up promoting and specialising in Wills, Trusts, and other such schemes to try and offset tax damage limitation, the cowboys will inevitably of course jump on this bandwagon, because you will never know the result of their actions/promises etc, but your heirs will.
June 14, 2025
I don’t think the electorate votes for sweet lies. In Brexit it was prepared to lose jobs etc to gain control of our money, borders and law-makers.
The sweet lies became sweet threats.
People can hear the ring of truth.
If the pension funds are destroyed then we will revert to people saving for their own retirement. An improvement. We need to break all these ‘mysterious’ fantasies. Savings need to be sacrosanct and honest money is required.
June 14, 2025
Sorry Alan – this comment was for Dave Andrews.
June 14, 2025
What you are stating Sir John, is Labour do not accept the well proven rules provided by Arthur Laffer.
The other well chanted lie put about by Labour and its brain challenged thinkers is, ‘it’s the rich what made us poor’.
Reeves clearly comes from the Ange Rayner rather than the Ayn Rand side of the intellectual spectrum.
When all of the wealth has left and the pension funds have run out, due to policies from Reeves hero, (thanks Gordon) they will simply claim it was the Tories £22billion black hole that left them no choice.
If they concentrated on wealth creation rather than the inane ‘growth’ target they have adopted things might be different. Sadly they don’t understand the difference
June 14, 2025
I wonder how many people are aware that IHT has to be paid within 6 months of the end of the month of death.
Tax cannot be paid out of the Estate as you cannot liquidate any of the Estate without Probate and paying HMRC their share, so the executor has to either pay the tax themselves, or arrange to take out a loan from HMRC at (I believe) 4% above base rate.
Aware HMRC want to be sure of getting their money, but in 6 months, it sometimes takes this long just to get probate itself, and all that after having sorted out the complications of any estate.
Thus a completely unrealistic time frame with another financial penalty added.
Even when using a solicitor (another expensed complication) it often takes well over a year.
Once again a Government failure to understand the result and complications of its own legislation.
June 16, 2025
There is no come back on the probation office either. A modest estate (less than £200k) resulted in a year and a half of trouble for the executor even though they used a solicitor and all the paperwork was presented officially. The losses on the estate were high a flat sale fell through, that retirement flat incurred council tax and management fees, the inheritor, his son died during the probate! A complete an utter screw up with no recourse.
June 14, 2025
Good morning. An excellent review, condensed the week’s MSM output.
June 14, 2025
There is no need to give up on the Labour plan “to soak the rich to pay for everything” if we recognize, as Wrecker Reeves may soon, that people on the national living wage are rich. It is true, for amongst them will be car owners, tourists, and restaurant patrons and if they are rich enough to afford some or all of those luxuries they can pay more tax too. “Squeeze until the pips squeak” as a Labour chancellor once said.
June 14, 2025
Oh people on benefits are very rich. Add it up: housing and the amount they would have to have in the bank to get the income they do – after tax.
They are much wealthier than workers on the minimum wage. They can even afford to have 12 children! Like Musk. Nobody else can afford that.
June 15, 2025
Well they are dealing with the system as pertains. The real blame lies with the system designers PMs Blair through to Starmer inclusive!
June 16, 2025
If you can get on the benefits gravy train there is no getting off now. It doesn’t take long to realise you’re better off not working. I know people that have done it for forty years and are now retiring on pension credit.
June 14, 2025
Perhaps if it was just the case of normal socialist jealousy, their general incompetence, their hatred of the middle classes and their inability to even know what the word ‘budget’ means, we might think this was your average labour style administration, based on that of Harold Wilson.
It’s far worse than that – along with France and Germany the UK is all but bust, we have a minus growth rate and we expect even harsher taxes to come while we run out of energy – why do we follow the same path as other countries so closely? Similar despotic legislation, the same attitude to increasing debt, failing industries?
The master plan appears to be driven by the WEF, for without such a coordinated plan how could we all be sinking together at the same time?
The chancellor pretends that she knows what she is doing, but all she wants to do is punish us with higher taxes and less benefits, but never mind she can always target pensioners when she runs out of other quarry – A 15 year old would be able to better manage our economy.
June 14, 2025
That’s very interesting; l thought the OBR denied the efficacy of the Laffer Curve.
June 15, 2025
How can anyone deny it. If tax rates are 100%+ who will choose to work? Will they even have money for the bus fare to get to work?
June 14, 2025
The Government is considering a new proposal for a mandatory digital ID scheme called “BritCard” that would make us all reliant on a digital pass to go about our daily lives.
73 years ago Winston Churchill’s government scrapped ID cards. Why? In his words, to “set the people free”.
June 14, 2025
We only had ID cards during the war. Never before or after. This is an international digital identity that is being proposed. Even Trump has bought in.
You can be debanked worldwide – removed from the power to buy food. Complete control.
We shall have to break the machines – we shall all become ‘blade runners’.
June 15, 2025
That’s why we keep hearing about the necessity for large Data Centres. It’s YOUR data they will be processing / monitoring 24/7.
If you sneeze, they want to know about it.
June 14, 2025
Remove money from the economy and you remove the wealth creation increase the tax take. Basic economics or more seriously ‘maths’
The easiest way by a ‘country mile’ to increase real tax take is to have a vibrant growing economy, where wealth adds to the tax take. .
But, none of this is what this Government and Parliament are about, the mythical idea of a WEF ‘Great Reset’ is becoming a reality under their direction in their Marxists minds. That is there aim and direction, to complain about the mundane constraints and impediments being imposed is missing the point Parliament the HoC along with the HoL are on a mission to create a country in their image that bows down and takes their personal orders – Rulers. As such to ‘work with’ is not on the agenda, to serve is not on the agenda its simply about rule by the Politburo for the benefit of the Politburo.
June 14, 2025
We know from remarks by senior Labour politicians (leader and shadow attorney general) that the economies of Cuba and Venezuela are admired by our Civil Service. But culturally they prefer those of the misogynistic ME & Africa as evidenced by the encouraged importation of migrants from these regions. Even unidentifiable illegal fighting age men who break into the country are rewarded with free accomodation upon arrival in hotels and houses, free heathcare, £40/week pocket money and the freedom to roam our streets and take black market jobs if they wish. Furthermore you would have thought it would be concerning to them that we are seeing that settlement in the UK of these migrants does not convert them or their offspring to accepting western cultures, laws and values.
June 14, 2025
There is something called the Laffer Curve, I believe.
June 14, 2025
The problem is, that successive governments continue to make more promises / benefits / bribes. These have to be paid. To that end you cannot deal with the Laffer Curve util you deal with the underlining problem of the UK economy – There are more taking out than putting in.
June 14, 2025
Sir John
We must recognise that the Worlds sudden increase in the price of energy gets to fill the Chancellors coffers with an unexpected surge.
It is forgotten these rises causing costs to rise, making things less affordable, less saleable and reduce tax from elsewhere – that doesn’t count.
Sorry to keep banging on about the same old thing. But today’s predicament is of our legislators making, the majority banned the UK’s future before having an alternative resilient self-reliant cost-effective future in place. They have banned the UK from being part of the World. They have maliciously crippled the UK in ways not served up in any of our competing nations.
June 14, 2025
One only has to look across the Channel to see what happens when government decides to fleece the wealthy. When Hollande introduced a wealth tax, the owners of land used as campsites or vineyards where I holiday cleared off across the border to Monaco to join the super wealthy.
The tax vultures in the Treasury have identified BTL as a target. There are 2 million UK investors who have been buying old property and converting or improving it to let and now provide most of the necessary rental housing. The capital gains could be a million or more per investor and CGT has been raised to 28% if they sell and then the buyer pays raised SD. Because of aggressive legislation from July, which allows a tenant to occupy a house permanently and large fines for allowing mould following misuse, landlords are being forced to sell. 50% are selling in my area where our society has surveyed members. But the grab doesn’t stop at CGT and SD. Most landlords with gains are in the snuff it zone and another 40% IHT will be due. If I sell the combined tax amounts to 55% on a house worth 66k. Fortunately my tenant left and I Dec not to re-let it.
Another little change introduced has apparently been the withdrawal of CGT reduction on a house once let but re occupied by the owner. I had hoped to sell my home of 20+ years which I had previously let for 10 years but now HMRC advises that proportional reduction does not apply. A friend who has sold her flat has just been fleeced.
June 14, 2025
House worth 660k
June 14, 2025
The thing that annoys me, is that people like yourself invest their money knowing that they may lose some if not all, and yet, should you dare to make a profit, the government thinks it OK to profit (tax) from the risk that you took with your own money. Profit (tax) that they will then waste.
June 14, 2025
Laffer, Laffer, Laffer, but nobody is laughing. Await the call to the IMF.
June 14, 2025
“The problem with Socialism is that eventually you run out of other people’s money”…M. Thatcher
But the lesson is never learned.
June 14, 2025
The real problem Mick is – that they damn well know this and just don’t care!
June 14, 2025
919 criminals were allowed into the UK yesterday; and escorted from the safe country of France…
June 14, 2025
gc :
Because they actually want them here.
June 14, 2025
Stupid people make stupid decisions! That is precisely what is happening under this Labour government. None of them has run a business, large or small, and none of them have had to meet the monthly payroll without fail. The PPE degree, which most of them have, teaches them nothing about the right way to manage an economy.
They have no respect for the UK’s past and no concern for its future. In everything they do, they make life a little harder for ordinary people. The frozen tax thresholds, brought in by a”conservative” government and extended by Labour, are an absolute disgrace. They will run out of money well before 2029, and then there will be real austerity enforced by the IMF. This Government is an absoluite shambles!
June 14, 2025
Nothing will change until the cowardly, ignorant Conservatives stop dissociating themselves from Miss Truss.
On IHT, the pernicious damage to the economy is greater than made out. The big fish move their money out of reach or into unproductive schemes like woodland when they could be willingly investing and getting a return. Only the little fish are taxed, and as they only die once, not once a year, they don’t bring in enough to justify the immorality of the tax. A big push must once again be made to remove IHT. And stamp duty.
June 14, 2025
Oh there re better lessons for them than Truss (who refused to cut spending!).
Chancellor Sunak gave a ‘holiday’ to stamp duty and the tax take skyrocketed.
We he did not want all that money coming in permanently, obviously, because he reinstated the tax to throttle it.
June 15, 2025
Well hardly a holiday other than for properties under 250k and a small saving for first time buyers up to £450k I think. It come back in under Reeves. Stamp duty used to be 1% top rate now it is up to 15% an absurdly high and damaging tax level for a turnover tax! So people do not move, you already have other moving costs agents, legal, sometimes CGT, removals, mortgage fees, valuations…
June 14, 2025
It call manage decline.
June 14, 2025
In 2020, pre Covid, the state in the UK ran on £650bn of taxes. Now it apparently needs £1.1 trillion: nearly a 70% increase.
June 14, 2025
Because we are providing benefits to foreigners. Subsidies loss making renewables. Pay out vast sums of money to foreign countries. Pay for losses on BoE Bonds. And so on.
All of which we could stop doing.
June 14, 2025
How can the parliament lords door cost £9.6m …..£9.6 million for a door ?
https://www.bbc.co.uk/news/articles/cj427p80vvxo
June 14, 2025
Does it keep them in if we lock it? If so, worth every penny!
Pity Kahn was not made a Peer.
June 15, 2025
Indeed arise Sir Sadiq Kahn – for services to wrecking London, vastly increasing knife crime, theft crime, road blocking and motorist muggings!
Peers criticise £9.6m House of Lords front door. It is not the inanimate “door” that needs criticism – it is the people who specified it, ordered it, designed it, made it and fitted it. Hopefully they will not pay until it works properly.
June 14, 2025
So ! Will anyone be held to account and dismissed ?
Who am I kidding 😉
June 14, 2025
Afternoon John.I am tired of trying again and again to get myself my past standard of living,but there are a lot of people out there who can’t see past their lazy uninspired way of living and actually have time to work out their jealousies.
These days I am lucky enough to be able to earn a little more to supplement my pension, but it won’t go on until I die.I am taxed to death every way I turn at the same time as serving legal and ? illegal immigrants .I am there to serve and let the new public mix make a fool of me backed by government.I could go on but I personally am not jealous of anyone.
June 14, 2025
When devising a revenue stream business tries to maximise it. Politicians know there is always another way to tax people so they will persist with a dysfunctional tax at a high rate purely for ideological purposes and then find another one to plug the gap.
Politicians are generally quite dumb and blinkered.
Reduce tax rate, increase revenue, it’s a fairly well proven concept.
June 14, 2025
Ironic that we are helping to fund the budget for Mauritius (a tax haven with no CGT, no IHT and low income tax) with our taxes. Yes back to the 70s. The politics of envy – economic suicide.
June 14, 2025
From the Telegraph – “Mark Carney’s conversion from eco warrior to oil and gas champion – Former Bank of England governor aims to turn Canada into an energy superpower”
“It means using our oil and gas here in Canada to displace imports wherever possible,”
“It makes no sense to be sending that money south of the border or across the ocean, so yes, it also means more oil and gas exports – without question.”
Yet as a member of the British Establishment? a British bureaucrat! He preached the opposite
Brendan Long, a leading energy analyst, points out that the UK is the only large global oil producer to have deliberately cut its production in recent years, signalling the long-standing net-zero legacy left by Carney.
“It means that while Canada’s oil and gas industry is ramping up production under Carney, the UK remains aligned with the anti-oil and gas ideology he promoted when he was the governor of the Bank of England,” he says.
Who knew? ….
June 14, 2025
Our lot are still sitting by the ‘fax machine’ awaiting their orders.
June 15, 2025
They never seem to learn though. Left of centre statist economists never seem to consider human behaviour when proposing a larger state controlled economy.