What's the logic of inheritance tax?
Discussion
bertie said:
Can anyone explain the logic behind inheritance tax?
You buy something with your tax earned income, then upon your death you get taxed again to give it to someone.
Surely that's taxing you twice?
Which administration brought it in? It was in the early 1900s if I remeber.
The logic behind it is the Government makes huge amounts of money from it.
It is perhaps the most unfair tax there is. A final kick in the bollocks from the state if you like.
But as for being taxed twice - you are taxed twice or more on everything anyway. You pay income tax, then you pay tax on anything you buy. Tax is applied to transactions, not money.
It has to be remembered that there have been death duties to pay in the UK for hundreds of years
Inheritance tax is nothing new, but it is an evil tax because the threshold has not gone up with the staggering rise in property values the last few years....
Still, at least it keeps a few chavs on benefit to pay for their beer, fags and drugs.....
Inheritance tax is nothing new, but it is an evil tax because the threshold has not gone up with the staggering rise in property values the last few years....
Still, at least it keeps a few chavs on benefit to pay for their beer, fags and drugs.....
There is no logic. It's greed, pure and simple.
You scrimp and save, you buy a house with taxed income, pay Stamp Duty on it (another tax) and then when you die the Tax Man wants another bite of the cherry - he wants to tax you on the proceeds of something that has been taxed twice already.
Likewise, if you're lucky enough to leave savings (taxed income) that you have also paid income tax on the interest of, he wants to tax that too.
Then, to add insult to grief, not only does he get death duties (or whatever they're called now), your beneficiaries are likely to have to pay Capital Gains Tax too.
Fair? Tax? Not two words that appear next to each other in my book, unless the word "un" is between them.
(Don't get me started - I buried my grandmother earlier in the month)
You scrimp and save, you buy a house with taxed income, pay Stamp Duty on it (another tax) and then when you die the Tax Man wants another bite of the cherry - he wants to tax you on the proceeds of something that has been taxed twice already.
Likewise, if you're lucky enough to leave savings (taxed income) that you have also paid income tax on the interest of, he wants to tax that too.
Then, to add insult to grief, not only does he get death duties (or whatever they're called now), your beneficiaries are likely to have to pay Capital Gains Tax too.
Fair? Tax? Not two words that appear next to each other in my book, unless the word "un" is between them.
(Don't get me started - I buried my grandmother earlier in the month)
Thanks for reminding me, the new name for "death duties" is "inheritance tax".
This has upset my mother no end. As the principal beneficiary of my grandmother's will, but with my sister and I receiving a small inheritance also, she was expecting my sister and I to pay the "inheritance tax" on our respective inheritances. A reasonable assumption for the uninformed.
Now she has learnt that the estate has to pay for it, which suggests that the original name of "death duties" was a less misleading term.
She is particularly upset because she feels she is paying our tax, and doesn't accept that it is the estate is paying for it on the grounds that the estate less fees & deductions (including tax) less the inheritance my sister and I receive is hers, ergo the estate paying for the tax is coming out of "her" inheritance.
Sigh. There's nothing like a family death to stir up the crap, is there?
Edit:
>> Edited by JonRB on Wednesday 6th October 23:46
This has upset my mother no end. As the principal beneficiary of my grandmother's will, but with my sister and I receiving a small inheritance also, she was expecting my sister and I to pay the "inheritance tax" on our respective inheritances. A reasonable assumption for the uninformed.
Now she has learnt that the estate has to pay for it, which suggests that the original name of "death duties" was a less misleading term.
She is particularly upset because she feels she is paying our tax, and doesn't accept that it is the estate is paying for it on the grounds that the estate less fees & deductions (including tax) less the inheritance my sister and I receive is hers, ergo the estate paying for the tax is coming out of "her" inheritance.
Sigh. There's nothing like a family death to stir up the crap, is there?
Edit:
anonymous said:
[redacted]
Couldn't have put it better myself. >> Edited by JonRB on Wednesday 6th October 23:46
Actually, this is one of the few taxes I agree with (in some sense)... although it really needs to go up with inflation, rather than the crazy situation at the moment where it just doesn't budge.
Basically, until around 1900 or so, there wasn't inflation, therefore the value of everything was static. Since then, we've had inflation. Now, if everyone were to inherit, say 10x an annual income (or potentially much more) upon their parents death, then that'd mean that the wealth of each person would increase far greater than is currently the case. This wealth would push inflation even faster, devaluing the inheritance. By limiting it, you're limiting the amount of money in distribution, and hence limiting inflation to some extent.
On a personal level, I think it's good to limit unearned wealth - it levels the playing field for each generation, if only a little.
Disclaimer: Whilst I may currently work in finance, I'm no expert on inheritance tax, or the amount that it affects inflation, and it probably just goes to pay for more frickin' quangos and scameras.
>> Edited by J_S_G on Wednesday 6th October 23:49
Basically, until around 1900 or so, there wasn't inflation, therefore the value of everything was static. Since then, we've had inflation. Now, if everyone were to inherit, say 10x an annual income (or potentially much more) upon their parents death, then that'd mean that the wealth of each person would increase far greater than is currently the case. This wealth would push inflation even faster, devaluing the inheritance. By limiting it, you're limiting the amount of money in distribution, and hence limiting inflation to some extent.
On a personal level, I think it's good to limit unearned wealth - it levels the playing field for each generation, if only a little.
Disclaimer: Whilst I may currently work in finance, I'm no expert on inheritance tax, or the amount that it affects inflation, and it probably just goes to pay for more frickin' quangos and scameras.
>> Edited by J_S_G on Wednesday 6th October 23:49
J_S_G said:
Actually, this is one of the few taxes I agree with (in some sense)... although it really needs to go up with inflation, rather than the crazy situation at the moment where it just doesn't budge.
Basically, until around 1900 or so, there wasn't inflation, therefore the value of everything was static. Since then, we've had inflation. Now, if everyone were to inherit, say 10x an annual income (or potentially much more) upon their parents death, then that'd mean that the wealth of each person would increase far greater than is currently the case. This wealth would push inflation even faster, devaluing the inheritance. By limiting it, you're limiting the amount of money in distribution, and hence limiting inflation to some extent.
On a personal level, I think it's good to limit unearned wealth - it levels the playing field for each generation, if only a little.
Disclaimer: Whilst I may currently work in finance, I'm no expert on inheritance tax, or the amount that it affects inflation, and it probably just goes to pay for more frickin' quangos and scameras.
>> Edited by J_S_G on Wednesday 6th October 23:49
What a load of socialist rubbish!
vixpy1 said:
What a load of socialist rubbish!
If there's one thing I'm not, it's a socialist! I do see the sense in not allowing wealth to be passed down from generation to generation completely unchecked. I doubt very much that the government's intentions with it are for the "greater good", mind...
If there were no inheritance tax, I can see some very interesting tax fiddles being done through it, too.
J_S_G said:
vixpy1 said:
What a load of socialist rubbish!
If there's one thing I'm not, it's a socialist! I do see the sense in not allowing wealth to be passed down from generation to generation completely unchecked. I doubt very much that the government's intentions with it are for the "greater good", mind...
If there were no inheritance tax, I can see some very interesting tax fiddles being done through it, too.
Hmm Got to agree with vixpy there. Your parents or grandparents are at libbity to allocate their money where they will. They earnt the money how much or little it is so why cant the family keep it ?
Anywho the way to avoid it is to buy a working farm and outsource the running of it. Simple. Or transfer the money in the x years required before death .... maybe having a family ltd company is the way to go these days... skim the top off, go bankrupt and retire to somewhere hot.
>> Edited by Broccers on Thursday 7th October 00:21
J_S_G said:
What a load of socialist rubbish!
If there's one thing I'm not, it's a socialist! I do see the sense in not allowing wealth to be passed down from generation to generation completely unchecked. I doubt very much that the government's intentions with it are for the "greater good", mind...
If there were no inheritance tax, I can see some very interesting tax fiddles being done through it, too.
I fail to see your point re inflation. The money at the moment is merely passed through the goverment back into circulation, its still there.. and will be spent, hence affecting inflation. I firmly believe that taxed moneys should not be taxed again. Inheritance tax is a very socialist policy and as such one that i have no time for. It should have been abolished years ago.
What's the logic of inheritance tax?
What's the logic of a 3 bedroomed pokey little cottage in SE Corn-unemploymentzone-wall being worth £380K?
Ahhhhhh, it's ok. If I move to smokey old London, I might be able to afford one too!
600 years of family history within 2 miles of where my folks live. Thanks to Laissez faire, I will have to earn my money about 200 miles away to retire here. If I was a
p&*^*&^ani, there would be a law against this!
I love liberals, in fact I could probably manage several.
>> Edited by love machine on Thursday 7th October 00:48
What's the logic of a 3 bedroomed pokey little cottage in SE Corn-unemploymentzone-wall being worth £380K?
Ahhhhhh, it's ok. If I move to smokey old London, I might be able to afford one too!
600 years of family history within 2 miles of where my folks live. Thanks to Laissez faire, I will have to earn my money about 200 miles away to retire here. If I was a
p&*^*&^ani, there would be a law against this! I love liberals, in fact I could probably manage several.
>> Edited by love machine on Thursday 7th October 00:48
vixpy1 said:
I fail to see your point re inflation. The money at the moment is merely passed through the goverment back into circulation, its still there.. and will be spent, hence affecting inflation. I firmly believe that taxed moneys should not be taxed again. Inheritance tax is a very socialist policy and as such one that i have no time for. It should have been abolished years ago.
My economics isn't that hot, so I could be wrong, but I don't think it'd work like that if it's the government spending it.
Fundamentally, I just don't agree with people being able to succeed in life through handouts, and I think that's where inheritance tax irks me... it's basically unearned income. Thinking about it - you're probably right; in it's current form it probably should be abolished as there's no way of coming up with a system that can't be circumvented one way or another, it's just more tax hoops to jump through.
vixpy1 said:
J_S_G said:
Fundamentally, I just don't agree with people being able to succeed in life through handouts, and I think that's where inheritance tax irks me... it's basically unearned income.
Thats socialist politics mate, Are you sure your not a Socialist??
I was waiting for that comeback! I know it sounds that way, and I suppose is in its simplest sense, but it's just a general hatred of State handouts/National Lottery/ambulance chasers/any other form of obtaining money without effort (other than getting paid to sit in the office nattering on PH all day
). Just don't get me started on this at BT&P...
Edited to add: Now, spending drunken hours coming up with vaguely IT related get-rich-quick business plans I will be up for...
>> Edited by J_S_G on Thursday 7th October 01:10
Gazboy said:
...
Agree that that the legal bill thing around it is awful, and the last thing that anybody should have to contend with following a death in the family is something like that. And, similarly, there should be no stress on anyone writing a will when it comes to considering what they give to who.
I just don't agree with the principle of someone getting ahead in life because they were (in a morbid kind of way) "lucky" when it came to inheritance and ancestral wealth. £250k or whatever the current limit is seems (at present) a fair limit to me. I'm not claiming I'm right in this; I can see exactly why people think inheritance tax is one of the poxiest, lowest, most despicable taxes ever created. But it's just how I've been brought up to feel about money.
Gazboy said:
I see your point, but is that any different to someone being born into a rich family? Take AdamT for example (not a dig at you Adam btw), aged 18, he has traveled the world, and driven many cars worth more than Joe Average's house, done things that many people haven't done by their 40th birthday. I don't know Adam all that well, and I feel rude posting this, but the chances of him having spent his early teens in some shitty comprehensive are quite slim. I struggle to see how you could differentiate this with someone who has received money/property assets as a result of a loved-ones death.
Sorry Adam if this causes offence.
You're right, it's not any different to that at all. And personally I don't really find that fair, either, as I don't believe anyone that hasn't had to earn the money themselves can understand the value of it or the suffering and understanding that comes from having to go days where your parents apologised because they couldn't afford food (and I've been there). That doesn't make anybody that's had a privileged upbringing any less of a person, and I'd certainly not resent someone for it. I'm just a great believer in everyone starting from a level playing field and making their own breaks in life. When my time comes, my money (if I ever have any!) won't be going to my kids (again, if I ever have any
)... I'd rather they have a sense of achievement and accomplishment, knowing that everything they have is the fruits of their own labour. Again - all just personal opinion on what's important in life, each to their own, etc.Gassing Station | General Gassing [Archive] | Top of Page | What's New | My Stuff