A think tank has proposed giving all 25-year-olds born in Britain a “citizen’s inheritance” of £10,000 that could be spent on rent or a home purchase.
The suggestion, from the Resolution Foundation, forms part of a number of measures to address “inter-generational unfairness”.
The Resolution Foundation’s Intergenerational Commission – set up to look at issues affecting younger generations such as saving for their retirement and getting on the property ladder – suggests that from 2030, citizen’s inheritances of £10,000 should be available from the age of 25 to all British nationals or people born in Britain as restricted-use cash grants.
They would have to be spent on funding education and training, deposits for rental or home purchase, investment in pensions or start-up costs for new businesses that are also being supported through recognised entrepreneurship schemes.
To fund this, the commission proposes abolishing inheritance tax and replacing it with a lifetime receipts tax with lower rates and fewer exemptions.
Everyone would have a lifetime receipts tax allowance of £125,000 rising with inflation. Beyond this threshold, any new gifts or inheritances received would be taxed – at significantly lower rates than the current system. Lifetime receipts above the allowance and up to £500,000 should be taxed at a basic rate of 20%, with receipts above £500,000 being taxed at 30%.
This compares with the current system that starts at charging 40% on inheritances from individual estates worth above a £325,000 threshold.
Other proposals to support the younger generation include halving Stamp Duty on property purchases by first-time buyers and movers and retaining a higher tax rate on the purchase of additional properties.
It also proposes introducing a time-limited cut to Capital Gains Tax for owners of additional properties selling to first-time buyers, requiring landlords in all parts of the UK to be licensed, and replacing council tax with a progressive property tax for home owners.
Comments (6)
If you give first-time buyers an extra £10,000 to spend each all that will happen is prices jump by a similar amount. We saw what happened when Help to Buy 2: Mortgage Guarantee was introduced at the beginning of 2014.
New (second hand) car, a few bevies and eat at Subway for a couple of weeks rather than take a packed lunch from mum, what do they think these kids are going to do with 10k. it’s not all about the economy, the first things these kids do when they pass their test is strap themselves up for a car loan and hit their credit cards, we all bought old bangers and saved a bit of cash in the Old 🙂 days.
No more thinking please..:)
I don’t like the idea. There is so much wrong with this idea that the oldies must fork out for the youngsters when often this will mean poorer people who’ve worked ****** hard and been careful with their money throughout their lives shelling out for some people who have good incomes but haven’t bothered to save – or even for some who have bothered to save and/or are pretty rich. That’s all ridiculous and grossly unfair. At least it’s fairer though than Right to Buy which confers much larger sums on the lucky few who have managed to access social housing. They get a windfall courtesy of the tax payer. That’s a disgraceful abuse of public funds. And at least it is fairer than Section 24 which makes landlords who have mortgages pay loads more tax than those who have no mortgages – another hugely unfair tax.
The Government and these annoying think tanks should be more interested in bringing back fairness into the tax system and not looking for targets they can milk or blame.
It’s coming up to my birthday. Can I have 50k for the new electric Jag?
Is someone trying to buy votes?