The UK Already Has a Nasty Wealth Tax
The latest Autumn Statement cut the capital gains tax allowance. It's going to be a big pain for investors in these inflationary times.
Looking grim.
Photographer: Dan Kitwood/Getty Images EuropeInflation in the UK is set to run at close to 10% this year and in high single digits next year — or so says the Office for Budget Responsibility. You’ll want to find a way to outrun that. The bad news is, you will probably find that you cannot.
Pensioners and welfare recipients have discovered this week that their incomes are going to rise with inflation. That’s nice. But the rest of the country is in trouble. Real wages are falling (i.e., wages are rising less than inflation), and going forward you will be keeping less of your income anyway: The freezing of income tax allowances announced in the Autumn Statement will drag huge numbers of people up a tax band. And at the higher end, a good number will end up paying significantly more tax than before, even without a pay rise, as the threshold for 45% income tax is falling from £150,000 ($178,770) to just over £125,000.