George Osborne shows his tax avoiding core:
Hat tip: The Green Benches
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Any chance of a transcript?
Some of us read your blog on mobile devices that won’t play it, or can’t due to limited bandwidth.
Some have visual or hearing impairments and, being second-class citizens, are used to the exclusion: but that does not excuse you, any more than it excuses big media companies who host AV-only news material on their websites, with no accessible alternative.
I take the view that those who wilfully exclude a segment of the population from their conversations – and from their business – have nothing to say or to see that’s worth my attention , and no good reason to receive my money.
Sorry: I won’t have time to do that
Like many of my blogs, this one was done very quickly and that has to be the case
Apologies
If anyone ever thought his beliefs and values meant he took any other view, Richard, and that his words on this matter are anything other than PR they are very gullible indeed. You have over the last year documented on a regular basis policies driven by the Treasury that more than compensate for and undermine any policy the coalition has so far adopted to tackle avoidance and evasion. Mind you, after looking through the so called audit of pledges documents yesterday, as they clearly have no idea what an audit actually is I’m not surprised.
Here is a transcript of Osborne’s words. I’ve edited out the usual “ums” and “errs” found in speech.
There has clearly been a phone question from somebody called Bill, about inheritance tax and avoiding the cost of personal care in old age.
Osborne says,
‘I mean, the one piece of advice I would give to Bill is, “There are some pretty clever financial products which enable you to, in effect, pass on your home or the value of your home to your son or daughter and then get personal care paid for by the state.” I probably shouldn’t be advocating this on . . .’
You beat me to it David! Was about to post the same, so can confirm accuracy – and add the last word which was “television” – ie “I probably shouldn’t be advocating this on television”.
But for me, the nods & winks body language – notably the rapid eye-brow raising – that accompanied this say far more than any words about the beliefs and values of the speaker. At least for someone like me outside the UK who is thankfully spared the misfortune of seeing him perform regularly. Is this guy really the UK Chancellor of the Exchequer? Or is this a spoof? No need for reply (rhetorical questions!) – but really what has this country come to? Watching this – and also some recent live broadcasts from parliamentary debates, I weep for my country of birth.
So for anyone who can, I suggest you should also watch the (very short) clip.
I totally agree. The words are to be expected but the evident pleasure in his suggesting ‘pulling a fast one’ speaks volumes about his current ploys.
Did they edit out the bit where he opened his jacket to reveal a row of what appeared to be “Swiss” watches attached to the lining?
That man should be in jail
I wonder if he’s talking about people using deeds of variation to dodge inheritance tax on million pound townhouses.
Ed?
When was this broadcast?
2005 ish
Stupid yes but he’s talking about care costs not avoiding inheritance tax. Making potentially exempt transfers is specifically allowed in the rules so doesn’t break your definition of tax avoidance (even if over the IHT threshold). It would be within the spirit of what has been laid down by parliament.
Avoiding that obligation is better?
Not at all. Like I said he’s stupid. Just pointing out it’s not tax avoidance which is the title of your piece.
I think you’re moving into the realms of pedantry at best
I think Fiona addresses the point, well
I do not understand how it is not tax avoidance, actually. If you get rid of the asset you do avoid the inheritance tax. At the same time you avoid the care costs which parliament has legislated for. So it seems to me to be dodging two obligations rather than one. Admittedly only one of those is tax, but other parliamentary decisions should presumably be viewed in the same way as tax avoidance.
Quite so
@Fiona: because transfers to children are intended to be exempt by parliament as there’s specific legislation to allow them (provided certain conditions are met). If it is the intention of parliament it can’t be tax avoidance per the definition that regularly appears on this very blog. It is no different to a pension contribution which also reduce tax.
It’s clear Osborne was seeking to get round the will of parliament
His language could not have been clearer
As Richard Murphy says, he was clearly advocating the use of “clever” financial products to avoid paying for care: this is a distinction without a difference, because it is quite clearly not what parliament intended, any more than offshoring profits is. You can do it, and it is legal. But if it were intended that people should not pay for care then there would not be charges. That is something I would welcome but it is not the law. It is obvious from the fact that “clever” instruments are required and, as I understand it, if you do not live for at least a set period after the transfer the manoeuvre does not work.
These things are not difficult to understand and deal with if you look at the other end of the scale. If one claims benefits then if you divest yourself of capital they just assume you have not done so. There are also loopholes there: certain uses of the money are seen as legitimate. They are few and there is an overarching rule that you cannot spend the money solely to become eligible for benefits by coming in under the (very low) capital limits.
@Fiona. There’s no doubt about the care costs point and I’m not talking about that. I’m just saying you can’t extend that to infer he’s advocating tax avoidance as well when he’s quite clearly talking about care costs. It’s just not tax avoidance even if it avoids care costs for the reasons I mention. It’s avoiding care costs only – which I accept is wrong.
Respectfully Mary, you are wrong and Fiona is right in my opinion
This correspondence is closed
Clearly the suggestion on care costs is totally wrong and suggestive of his general attitude. However, an individuals would have to live another 7 years to avoid an IHT charge and these are people just about to go into a care home. That doesn’t strike me as a plausible a suggestion for tax avoidance (whether using complex financial products or a straight cash transfer). Per the Guardian the average life span of a care home resident is between 1 and 2 years so in the vast majority of cases the amounts would still be chargeable to IHT even if the estate was above the lifetime allowance.