Tuesday, 26 July 2011

Going to the Dogs: Alexander McQueen's Will meets Tullett Prebon

All the papers report that Alexander McQueen left his money to the dogs: £100 000 to Battersea Cats' and Dogs' Home, £100 000 to the Blue Cross sick animal centre, and £50 000 in trust for the lifetime care of his own pet dogs.

In a Will worth £16 million, it's not a lot, just rather sad. Why didn't he leave it to George Osborne?

Very few people now leave money to the State, voluntarily that is, though they used to. A Report out today indicates that we badly need them to.

Officially, public debt stands at around £900 billion or over 60% of GDP. But lots of things are kept "off balance sheet". In a report for the brokers Tullett Prebon, Project Armageddon, Tim Morgan factors them in:

Add the final costs of bank bail outs, of unfunded future public sector pension commitments and of payoffs under Blair-Brown private Finance contracts and the debt figure rises four times to £3.6 trillion representing £135 000 per household. [I am using The Daily Telegraph's reporting]

It seems inevitable that at some point, like when they die, the present generation (the Baby Boomers - people like me) should be asked to pay and, failing that, made to pay.

Only yesterday, I took comfort in the £200 000 equity in my flat, the mortgage down to a few thousand. This morning I have to subtract £135 000 from that - the burden of public debt per household. Of course, if you shared out that figure proportionately rather than simply dividing by households, it would be less. For Sir Fred Goodwin it would be more.

However unpalatable to the Tory faithful, Chancellor George Osborne is going to have to look hard at inheritance tax. I make one suggestion.

At present, there is an exemption limit and above that the State takes a percentage of the value of an Estate at death. I would modify that to a variable percentage. Just as the State imposes supertaxes on alcohol and tobacco in its attempts to discourage them or make their users pay for the social costs of their habits, so it should tax legacies it deems noxious at a higher rate than those it deems benign. Ninety five percent on legacies to cats' and dogs' homes

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