Inheritance tax
Discussion
Mutterings from Tory backbenchers concerning the inheritance tax. Another regressive tax which needs to be abolished, recent years have seen this tax net spread wider into more middle earners.
House price increases over recent years being one of the main drivers of the tax net spreading. Along with zero threshold increases meaning the house that cost £50,000 thirty years ago is now valued at a far higher value taking the owner, or rather the benefactors of the estate, into inheritance tax and a possibility.of a massive tax bill.
Fair or unfair ?
House price increases over recent years being one of the main drivers of the tax net spreading. Along with zero threshold increases meaning the house that cost £50,000 thirty years ago is now valued at a far higher value taking the owner, or rather the benefactors of the estate, into inheritance tax and a possibility.of a massive tax bill.
Fair or unfair ?
There's a very good argument to say that inheritance tax should be abolished altogether as one has already paid tax on the stuff that you leave as inheritance.
But I think, like most things tax-related with thresholds, there should definitely be an adjustment to reflect the modern cost base.
But I think, like most things tax-related with thresholds, there should definitely be an adjustment to reflect the modern cost base.
crankedup5 said:
Mutterings from Tory backbenchers concerning the inheritance tax. Another regressive tax which needs to be abolished, recent years have seen this tax net spread wider into more middle earners.
House price increases over recent years being one of the main drivers of the tax net spreading. Along with zero threshold increases meaning the house that cost £50,000 thirty years ago is now valued at a far higher value taking the owner, or rather the benefactors of the estate, into inheritance tax and a possibility.of a massive tax bill.
Fair or unfair ?
I see inheritance tax as something that is very useful and necessary to ensure a healthy capitalist society. The purpose being to prevent wealth from concentrating in too few hands over generations. The redistribution of wealth back into the wider economy at the point at which someone dies is a natural time to do such a thing.House price increases over recent years being one of the main drivers of the tax net spreading. Along with zero threshold increases meaning the house that cost £50,000 thirty years ago is now valued at a far higher value taking the owner, or rather the benefactors of the estate, into inheritance tax and a possibility.of a massive tax bill.
Fair or unfair ?
However, like many things, how it is currently implemented is peverse. It has been allowed over time to affect more and more families who are in no danger at all of collecting too much family wealth, and there are far to many loopholes and exploits used by the extremely wealthy who are.
Olivera said:
It's a fantastic tax, so i'd rather it was more onerous - not relaxed.
Certainly as it stands today all IHT does is nail people of "modest wealth". The less well off don't pay it at all and it's an easy tax for the seriously wealthy to avoid.At present death is NOT a disposal for CGT so you never pay both taxes at the same time. Many people effectively suppress the additional burden of IHT simply by making sure they avoid realising taxable Capital Gains in the later stages of life.
If (and it's a big if) IHT was removed you can bet your life the tax regime would be amended so that death becomes a disposal for CGT (i.e. taxable).
Muzzer79 said:
There's a very good argument to say that inheritance tax should be abolished altogether as one has already paid tax on the stuff that you leave as inheritance.
But I think, like most things tax-related with thresholds, there should definitely be an adjustment to reflect the modern cost base.
How have you already paid tax on what your house is worth at the point you die?But I think, like most things tax-related with thresholds, there should definitely be an adjustment to reflect the modern cost base.
Rivenink said:
I see inheritance tax as something that is very useful and necessary to ensure a healthy capitalist society. The purpose being to prevent wealth from concentrating in too few hands over generations. The redistribution of wealth back into the wider economy at the point at which someone dies is a natural time to do such a thing.
However, like many things, how it is currently implemented is peverse. It has been allowed over time to affect more and more families who are in no danger at all of collecting too much family wealth, and there are far to many loopholes and exploits used by the extremely wealthy who are.
The system is fundamentally broken, and while I agree its great in theory, as your second paragraph proves it probably better to scrap it altogether than keep it in its current form.However, like many things, how it is currently implemented is peverse. It has been allowed over time to affect more and more families who are in no danger at all of collecting too much family wealth, and there are far to many loopholes and exploits used by the extremely wealthy who are.
Same can be said for many aspects of tax.
S600BSB said:
How many people actually pay it? Less than 5%?
And a large proportion of that will be from (mostly unearned) housing equity. Most estates of married couples will see their children get up to £1million tax free. Hardly “getting nailed” is it?
Edited by NerveAgent on Tuesday 18th July 13:23
Its a tax that punishes the unprepared, though bad luck or mismanagment.
I'd like to see it abolished but with the present public finances it seems perverse to give a tax break to the rich. A better compromise would be to levy 20% on all estates excluding PPR, if you make it cheaper to pay than avoid, the ultimate tax take will increase
I'd like to see it abolished but with the present public finances it seems perverse to give a tax break to the rich. A better compromise would be to levy 20% on all estates excluding PPR, if you make it cheaper to pay than avoid, the ultimate tax take will increase
Murph7355 said:
S600BSB said:
How many people actually pay it? Less than 5%?
Less than 4%.It's straightforward to avoid in many cases.
But with so few paying it, it would seem to be one ripe for removing to simplify the tax system. Still 1p on VAT to more than make up for its loss.
IHT should remain. And ultra-rich avoidance of it needs to be curtailed.
The idea that we should get rid of a tax because the rich can avoid it is nonsensical, IMO.
NOTE: I say that as someone who is affected by this (recent grandparent death).
The idea that we should get rid of a tax because the rich can avoid it is nonsensical, IMO.
NOTE: I say that as someone who is affected by this (recent grandparent death).
Edited by GroundEffect on Tuesday 18th July 13:20
NerveAgent said:
S600BSB said:
How many people actually pay it? Less than 5%?
And a large proportion of that will be from (mostly unearned) housing equity. Most estates of married couples will see their children get £1million tax free. Hardly “getting nailed” is it?
I think that abolishing IHT would be a very difficult thing to sell, politically speaking. You'd be giving a £7 billion tax cut to the small minority that pay IHT.
Voters might well wonder how many schools and hospitals could have been built and staffed with that money.
I think a large uplift in the lifetime gift allowance - say to £10,000 per annum - with such gifts being exempt immediately from IHT, could be one way to both ease the IHT burden and to inject funds into the economy.
Voters might well wonder how many schools and hospitals could have been built and staffed with that money.
I think a large uplift in the lifetime gift allowance - say to £10,000 per annum - with such gifts being exempt immediately from IHT, could be one way to both ease the IHT burden and to inject funds into the economy.
iphonedyou said:
GroundEffect said:
The idea that we should get rid of a tax because the rich can avoid it is nonsensical, IMO.
I think the point was more so that very few people pay it anyway, and the take from it is almost negligible - so why not abolish it on that basis.Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff