[BITList] UK Budget

[John Feltham]

This came from a friend but it is quite true. The dollar amounts are Australian Dollars which are not much different, at the moment, from the US $.



I was reading the details of the UK budget and reflecting upon the difference between the UK and Australia some of which I detail below:

·         The tax free threshold for retirees has been frozen in the UK at £10,500. In Australia couples combined can have assessable income of $53,360 (£35,217) before they are liable for income tax. The figure is indexed upwards each year.
 
·         Unlike the UK there is no death duty in Australia
 
·         In Australia your private pension money can be withdrawn free of tax at age 60 or if invested in a private pension the invested funds are free of any tax or capital gains tax past age 60.  These funds can be left free of tax to a dependant spouse. Non dependants pay either 0% tax or 15% depending on how the super has been structured. I believe in the UK a tax of 55% applies to superannuation left to a spouse.  
 
·         The effective tax rate levied on superannuation within the accumulation phase is 15% and only 10% on capital gains. Saving through super is an effective way for those on high marginal tax rates to reduce their tax burden by salary sacrificing super contributions. In other words by this method you can reduce your salaried assessable income liable for income tax.
 
·         In the UK I read that private nursing homes in the south of England charge an average of £800 per week (£41,600 pa) and that you are expected to use up the proceeds of selling your house or other financial assets before government support is available for nursing home fees.  This sounds like a good way of destroying children’s inheritance unless you are wealthy. In Australia you can expect some Government support for nursing home fees even if you possess assets.
 
·         In Australia the Government encourage you to take out private health insurance by providing a rebate on fees charged by BUPA or other provider of 30%. This rebate rises to 35% at 65 and 40% at age 70.
 
·         In Australia unlike the UK all private schools receive some Government funding according to the socio economic catchment area where the parents come from. This results in a third of all pupils going to private schools which are mainly run by various Christian denominations. Fees in private schools can be affordable for working classes. For example the least expensive independent Anglican Grammar School in Melbourne charges $5,000 pa for day pupils and the most expensive Anglican Grammar school charges $28,000 pa.
 
·         In Australia the minimum adult wage is $30,643 (£20,224). I believe the minimum in the UK is about £12,640 pa.
 
·         In Australia the age pension for a couple combined is $29,614 pa (£19,545 pa). However the Aussie pension is means tested and cuts out when your assessable income exceeds $66,092.
 
·         In Australia service personnel who have been on active service get their state pension paid as a service pension at age 60 for themselves and their spouse instead of 65 or later. This is separate from their superannuation accrued during their time in the forces.
 

 
Both UK and Australia often suffer from economic mismanagement however I believe Australia has a better framework for tax on some issues. We of course have the benefit of flogging stuff we dig up out the ground to the Chinese and others.




ooroo


-------------- next part --------------
An HTML attachment was scrubbed...
URL: http://lists.bcn.mythic-beasts.com/pipermail/bitlist/attachments/20120322/37eb7bff/attachment.shtml