inherritance tax

[mcb123]

is there any one out there who acctually agrees with inheritance tax, i think its a horrible idea!

[DMA]

When I win the lottery one of the 1st things I am gonna do is take the Government to the court of human rights argueing that I.H.T is theft. I suppose they introduced it as people cud abuse the "system" by gifting money to employeess especially if the were family members, instead of taxable wages. But if you die why should your inherritance which has been taxed to hell to get to the point of it being an inherritance be taxed again if you leave it to your kids. Im an accountant and cud get fees for advising on IHT if I wanted but I think its a disgrace.

[dannydingbat]

On the basis that Income tax was introduced as a temporary measure to pay for a war hundreds of years ago and VAT was only supposed to go up to 17.5% for one year in 1993 before going back down to 15%, clearly, the Government of the day finds ways of raising money to pay for its housekeeping. While we need to raise billions to pay for the workshy and those who like to keep breeding kids without any means of support or any degree of responsibility, if it did not happen with Inheritance Tax, it would be rasied somewhere else.

[DMA]

But IHT is a double tax

Weve already been taxed to get there only to be taxed on the SAME money again (obviously "potentially" as life gifts and spousal gifts can negate it).

[Englishbird]

Totally agree with DMA. It is a double tax and I completely disagree with it existing in the first place, and now they want even more of it.

That money has already been taxed as income tax, capital gains tax, we're taxed on everything we spend it on (well almost) and then we die and the government claim nearly half of it back again. Surely there's something inherently wrong with this.

Does it exist in other countries?

[Hgrove]

I think it should be abolished. I am reliably informed it was abolished in Italy.

[gary baldy]

I love Inheritance Tax. Anything that means priviledge isnt passed down to the off spring of interbred horse face freaks is good in my book. In fact the rich shouldnt be allowed to breed anyway.
When a rich person dies us proles should be allowed to ransack their big houses and pick over the bones of their wealth.

[jake-the-peg]

Inheritance tax has been with us in one form or another for over a hundred years and Margaret Thatcher's government introduced the present system so no particular political party can be blamed or credited with it.

It's based on the priciple that the income is unearned by the beneficiary which seems fair when you look at it like that, especially where there's a threshold of over a quarter of a million pounds!

So it sounds like you're saying "I should get a quarter of a million drop in my lap and not have to pay a penny tax on it?"

Still it could be dumped but you've got to balance the books so you need to find about �3 billion or so that's what roughly 1% on income tax.

How much do you hate it? would you take a 1% raise to pay for that? It would mean that people who had no prospect of inheriting from a large estate would subsidise those from wealthy backgrounds

[gessoo]

gary_baldy. These days it's not just the rich that are affected by inheritance tax it's the ordinary man and woman in the street. Just think of what houses are worth these days. And I bet if you suddenly inherited a couple of thousand you wouldn't say 'no'

Also Inheritance Tax is very cleverly avoided by the very rich. Interesting programme on the TV last night showing how the rich cleverly avoided any form of tax!! So again, it's poor old 'Mr Average' that gets to cough up. It makes me want to spit.

[gessoo]

In other words I think it should be axed!!

[kags]

I agree with the premise of the tax itself - to make some attempt to prevent the gap between rich and poor ever widening. However, the threshold is too low, and I would prefer it to be graduated, only getting up to 40%, perhaps higher, for large estates.

There will always be schemes to reduce the amout of IHT payable, in the same way there are always schemes to minimise income tax. This will never change, and the people most able to pay for the advice will always be the ones who benfit most. But if we take this as an excuse to abolish a tax, then we would have to abolish all forms of taxation.

Still, whilst the Daily Express is ranting about IHT at least it is giving something else a rest.

[gessoo]

Yes, on second thoughts Kags you are right. I suppose that programme on TV last night just brought out the anger in me! I would not object to a graduated inheritance tax or to raising the threshold, but would like to see all the loopholes fixed so that the rich actually get to pay. I just want a fair Socialist country I suppose and at the moment it seems to be quickly going the other way. Nice to see you x

[kags]

nice to see you too gessoo, I hope you are well. If you are who I think you are you will be missed at a certain venue this weekend. I would like to join you in that fair socialist country one day......

[gessoo]

Love to all x

[jake-the-peg]

Of course one fair solution would be to put say 3% on the upper income tax rate and axe inheritance tax.

That way the less well off would not be subsidising large inheritances

Any takers?

[Hgrove]

I like Jake-the-Peg's suggestion.

[Miss Zippy]

Jake-the-peg�s suggestion assumes that all higher rate income tax payers are, by definition, well off! You only have to earn �38k before you fall into the higher income tax bracket (40%), which is hardly high net worth territory. I would like to see the IHT threshold significantly increased to, say, �500k and with a sliding scale of taxation, e.g. 10% for the first �100k over �500k, rising to say 60% for estates over �1m. The current threshold (�275k) means that the estates of many cash poor people (i.e. people whose only wealth is in their property) are dragged into IHT territory purely because of the rocketing house prices experienced since 1999, which I don't think is fair.

[jake-the-peg]

A sliding scale's not a bad idea miss Zippy but I suspect the maths doesn't add up at the rates you suggest.

You're starting by doubling the treshold the and only doubling the rate for estates over �1million, I think you'd hit a shortfall.

I'm not too convinced either about the arguement about cash-poor people being hit. If Inheritance tax was payable by a spouse on the death of their partner you'd have a point but I don't think that's the case.

I suppose there are a few cases where people are still living with their parents when they die and have to sell up and move on to pay the tax but they must be very few and far between.

Remember too it's possible to avoid this by transferring assets like houses to children, providing you then survive another 7 years (I think it is) there's no tax and a sliding scale up to then.

Rather depends on how much you trust your kids I guess!

[Miss Zippy]

I'm sure you're right jake that my maths don't add up! You�re right that a person can gift their property to a child (or anyone else for that matter), but for the gift to be a potentially exempt transfer, the donor must no longer live in the property, which doesn�t make this a very convenient option for most people. (This tax loophole whereby someone could give away their property but continue to derive a benefit from it was closed in 2003.)

[gessoo]

Interesting this. I know someone who lived with his mother until she died very recently. He is of retiring age now himself, an only child and due to inherit the house. Does he have to pay inheritance tax now or when he sells the house, and if he dies whilst still living there will the state claim inheritance tax? The house is in a very expensive area although only a modest dwelling - but it is definitely well over the threshold.