Silly question about a solicitor writing a bad will

[HenryJM]

Centurion07 said:

I assume you'll be giving your inherited money away to charity then since you feel you don't deserve it? You say you don't care now; wait until you actually come to pay that IHT and get back to me!

That aside, the bit in bold is the real point. An inheritance has already been taxed when it was accruing over the deceased's lifetime, and now the government feel they can help themselves to another 40% (over £325K) just so they can piss it up against the nearest immigrant/welfare scrounger/nhs IT project?

My current focus is on ensuring that their money is spent on them particularly making sure that my father has the best possible care in the best possible location. Unfortunately he has to be in a nursing home, so it's about making sure it's the best we can find. For my mother we've moved her to a flat in a retirement block with care services and she is much happier as a result.

It's their money to be spent on giving them the best they can get at this time of their lives.

[Centurion07]

HenryJM said:

My current focus is on ensuring that their money is spent on them particularly making sure that my father has the best possible care in the best possible location. Unfortunately he has to be in a nursing home, so it's about making sure it's the best we can find. For my mother we've moved her to a flat in a retirement block with care services and she is much happier as a result.

It's their money to be spent on giving them the best they can get at this time of their lives.

That's fair enough and just how it should be, but like I said, wait until it comes time to pay that IHT bill and let me know if you still feel the same about paying it.

[HenryJM]

Centurion07 said:

That's fair enough and just how it should be, but like I said, wait until it comes time to pay that IHT bill and let me know if you still feel the same about paying it.

I'm happy to pay the IHT when it's due, I'm used to paying 40% of my income to HMRC, it's very visible to me and resented given the effort put in to earning it. Paying 40% of money I've not earned will be a breeze in comparison.

[Centurion07]

HenryJM said:

I'm happy to pay the IHT when it's due, I'm used to paying 40% of my income to HMRC, it's very visible to me and resented given the effort put in to earning it. Paying 40% of money I've not earned will be a breeze in comparison.

You might not have earned it but your parents did. My point still stands; wait and see what it feels like when it comes time to write that cheque.

[HenryJM]

Centurion07 said:

HenryJM said:

I'm happy to pay the IHT when it's due, I'm used to paying 40% of my income to HMRC, it's very visible to me and resented given the effort put in to earning it. Paying 40% of money I've not earned will be a breeze in comparison.

You might not have earned it but your parents did. My point still stands; wait and see what it feels like when it comes time to write that cheque.

I'm used to paying tax bills, corporation tax, VAT, NI, PAYE, my own income tax and CGT. I've done six figure payments numerous occasions, I really don't think it will be a new experience for me. And as I've said before, making a large tax payment on money I've earned is much harder than this will be.

[Centurion07]

HenryJM said:

I'm used to paying tax bills, corporation tax, VAT, NI, PAYE, my own income tax and CGT. I've done six figure payments numerous occasions, I really don't think it will be a new experience for me. And as I've said before, making a large tax payment on money I've earned is much harder than this will be.

It's a different kettle of fish regardless of whether or not you're used to making payments of that quantity.

[HenryJM]

Centurion07 said:

It's a different kettle of fish regardless of whether or not you're used to making payments of that quantity.

Well it's clearly meaning different things to each of us, for you to imagine that I'd have a sudden transformation making a tax payment is as unlikely a suggestion as you suddenly changing your opinion.

[anonymous-user]

Doncha love it when someone who has never met you claims to know exactly how you think or feel or will think or feel? Or, to put it another way, when someone is so incapable of comprehending that not everyone thinks/feels as he or she does that he or she insists all must think/feel the same way.

[tenpenceshort]

You'd better believe I do.

Oh, wait....

[Centurion07]

Breadvan72 said:

Doncha love it when someone who has never met you claims to know exactly how you think or feel or will think or feel? Or, to put it another way, when someone is so incapable of comprehending that not everyone thinks/feels as he or she does that he or she insists all must think/feel the same way.

Just because you feel and behave one way today, it does not necessarily follow you will feel the same way when actually faced with the reality of the situation we're talking about.

[HenryJM]

Centurion07 said:

Breadvan72 said:

Doncha love it when someone who has never met you claims to know exactly how you think or feel or will think or feel? Or, to put it another way, when someone is so incapable of comprehending that not everyone thinks/feels as he or she does that he or she insists all must think/feel the same way.

Just because you feel and behave one way today, it does not necessarily follow you will feel the same way when actually faced with the reality of the situation we're talking about.

Oh I think I understand it well enough to know how I'll feel, assuming it happens.

[Red Devil]

Jim1556 said:

Not everyone's as fortunate as you, there's been plenty of cases of children haven to sell their family home to pay an IHT bill. It's bloody wrong!

I am entirely with you on this because that's exactly what happened to me. It may be fine and dandy for a wealthy individual like HenryJM who has half a million knocking around in petty cash to pay off HMRC but most of aren't that fortunate.

My father worked **** hard and was able to buy a desirable property. When he died he had been retired for nearly 25 years and it was the main asset in the estate. It was left to my mother but, due to the rate of increase in property values which escalated far beyond any even half commensurate one in IHT thresholds, when she died not long afterwards I had no hope of being able to pay the IHT due without selling it. I had lived in that house for 22 years and wanted to keep it as the family home but that option was denied to me.

So the government effectively penalised ME for not being filthy rich enough to pay their rapacious tax demand. Nice.

[jensenhealey2]

HenryJM, your point about the beneficiaries not havng earned the money, so not in a position to complain about the IHT, applies to the government as well. It did not earn the money, it's just helping itself, which is what governments seem to be best at.

The answer to Breadvan's point is that governments spend money less efficienly than individuals, so the less money govenments have to spend the greater the proportion of national wealth that is efficiently spent. Tax is not in itself a good thing, it is a necessry thing; as Bradvan's comment illlustrates, it is a form of rent seeking inimical to to an efficient economy. I firmly beleive that the best way for government to provie the platform for the economy of the country to prosper is for it to do as little as is possible commensurate with maintaining law and order and providing a fair and stable legal system.

[Jim1556]

I know we're all different, and I'm glad we are...

I think the main thing I see here is people with 'money' don't begrudge paying it out whether in IHT, property or whatever.

People who work (like me) who aren't fortunate enough to earn 'money' spit feathers at the thought of giving the government any more of my estate (or my relatives) than it already has taken while 'we' were alive...

I don't know many people who do six figure payments, and I congratulate you (Henry) on building a successful business, but try this example -

If you earned £20k a year, your relative passes (unfortunately), they leave everything to you which happens to be £400k including a £375k property.

£325k is safe, so out of £25k (let's say cash for simplicity), you'd have to give the government £30k or sell the house! I think you'd feel rather sick!

As I said, it's wrong and morally disgusting in my opinion!

Stop foreign aid, cap benefits, cap child benefit to 2 kids (don't get me started), get sensible people to agree contracts (for the best value, not their mates with back handers), stop NHS tourism, above all, stop wasting money! Then the Government wouldn't need all this excessive tax!

Edited by Jim1556 on Thursday 21st August 00:46

[Jon1967x]

Jim1556 said:

I know we're all different, and I'm glad we are...

I think the main thing I see here is people with 'money' don't begrudge paying it out whether in IHT, property or whatever.

People who work (like me) who aren't fortunate enough to earn 'money' spit feathers at the thought of giving the government any more of my estate (or my relatives) than it already has taken while 'we' were alive...

I don't know many people who do six figure payments, and I congratulate you (Henry) on building a successful business, but try this example -

If you earned £20k a year, your relative passes (unfortunately), they leave everything to you which happens to be £400k including a £375k property.

£325k is safe, so out of £25k (let's say cash for simplicity), you'd have to give the government £30k or sell the house! I think you'd feel rather sick!

As I said, it's wrong and morally disgusting in my opinion!

Stop foreign aid, cap benefits, cap child benefit to 2 kids (don't get me started), get sensible people to agree contracts (for the best value, not their mates with back handers), stop NHS tourism, above all, stop wasting money! Then the Government wouldn't need all this excessive tax!

Edited by Jim1556 on Thursday 21st August 00:46

You earn 20k and after IHT have been left 350k and you're unhappy? I call that greed. There is no obligation for the deceased to have left you anything and it's this attitude why people contest wills.

Your argument might as well apply to any tax. Why tax interest on savings? I've earns that money and everything it makes is taxed

[HenryJM]

Think of it another way. We have person A and person B. Person A ten years ago started a business, remortgaged his house, borrowed from wherever he could, went through several years with no money. Months went by where he paid himself nothing because paying his handful of employees came first.

Over time things got better, his 70-80 hour weeks started to work, he started to be able to pay himself the same as his employees then more. By the end of ten years his business was able to support 100 employees and he was paying himself maybe £250k a year with nice house, car etc. Had to turn a deaf ear to the bleating about rich people, the introduction of a higher rate tax and so on but hey, could anyone really say he hadn't earned it?

Over ten years he took from the company maybe £900k almost all of it in the second half of the ten years. Of course maybe £350k of that went in tax but he's kept maybe £550k of it himself. Rich bd, right?

Meanwhile one of his employees, drives a van for his company, he's ok, nothing special, works his hours, nothing more. His aunt dies, he's only seen her once a year at Christmas but due to lack of other relatives she leaves him £900k. But you know - £100k of that has to go in IHT!! Shocking, or what?

So which of these really has the right to question the system? The bloke who has worked every waking minute, provided employment to a lot of people, earned exprt revenue for the company and country, is now paying £100k a year in personal tax and into the millions in other taxes through his company. Is it that one or the one who has mainly sat on his arse all his life doing as little as he can get away with but has had to pay a shocking total, in this example, of 11% on the total of a windfall he'd done nothing to achieve?

[Centurion07]

HenryJM said:

Think of it another way. We have person A and person B. Person A ten years ago started a business, remortgaged his house, borrowed from wherever he could, went through several years with no money. Months went by where he paid himself nothing because paying his handful of employees came first.

Over time things got better, his 70-80 hour weeks started to work, he started to be able to pay himself the same as his employees then more. By the end of ten years his business was able to support 100 employees and he was paying himself maybe £250k a year with nice house, car etc. Had to turn a deaf ear to the bleating about rich people, the introduction of a higher rate tax and so on but hey, could anyone really say he hadn't earned it?

Over ten years he took from the company maybe £900k almost all of it in the second half of the ten years. Of course maybe £350k of that went in tax but he's kept maybe £550k of it himself. Rich bd, right?

Meanwhile one of his employees, drives a van for his company, he's ok, nothing special, works his hours, nothing more. His aunt dies, he's only seen her once a year at Christmas but due to lack of other relatives she leaves him £900k. But you know - £100k of that has to go in IHT!! Shocking, or what?

So which of these really has the right to question the system? The bloke who has worked every waking minute, provided employment to a lot of people, earned exprt revenue for the company and country, is now paying £100k a year in personal tax and into the millions in other taxes through his company. Is it that one or the one who has mainly sat on his arse all his life doing as little as he can get away with but has had to pay a shocking total, in this example, of 11% on the total of a windfall he'd done nothing to achieve?

The guy in your example is not paying £100K IHT. He's being robbed of £230K!

Yes, you're right that he's done nothing to earn it. However, if your self-made man had to pay an additional £200K in tax ON TOP OF WHAT HE'S ALREADY PAID you'd think that wrong surely, because that's essentially what's happening. The estate is being taxed AGAIN on money that has already been taxed during the deceased's lifetime.

Plus, why are you comparing one person's situation with another? It's not about what one person deserves over another, it's about what the government "deserves".

I think a better analogy would be fuel prices. You pay tax on tax when buying fuel for your car. You surely can't agree that that's ok?

For what it's worth, I don't think Person A in your example should be taxed at 40%+ either. It should be less.

[HenryJM]

Centurion07 said:

The guy in your example is not paying £100K IHT. He's being robbed of £230K!

No, his uncle left all to his aunt, his aunt left it to him, £650k was tax free, £250k was taxed at £40% hence £100k paid in IHT on £900k inherited. So the 11% this works out at is pretty usual, obviously it climbs as the amount climbs but the majority of people who do end up paying (which isn't very many) are essentially paying those sort of rates.

Centurion07 said:

Yes, you're right that he's done nothing to earn it. However, if your self-made man had to pay an additional £200K in tax ON TOP OF WHAT HE'S ALREADY PAID you'd think that wrong surely, because that's essentially what's happening. The estate is being taxed AGAIN on money that has already been taxed during the deceased's lifetime.

Your argument seems to be that there should only be income tax so that VAT, for example, shouldn't exist because you are paying that with money that you have already paid tax on. Stamp duty is another one, road tax - the list is endless.

So why is IHT different? It's tax on tax but pretty much every situation is.

Centurion07 said:

Plus, why are you comparing one person's situation with another? It's not about what one person deserves over another, it's about what the government "deserves".

Well the government needs income from somewhere, you can argue about how much but it needs money one way or the other. So it is about the individuals, which of them should be paying more that others.

Centurion07 said:

I think a better analogy would be fuel prices. You pay tax on tax when buying fuel for your car. You surely can't agree that that's ok?

As above, income tax is about the only tax that isn't paid from taxes income, the argument that this shouldn't happen means almost every tax other than income tax has to go.

Centurion07 said:

For what it's worth, I don't think Person A in your example should be taxed at 40%+ either. It should be less.

Sure, but whatever rate it is at the question still remains this:

Why should money going to an individual that they have worked hard to achieve require them to pay substantially more in tax than money received from a windfall that they have done nothing to acquire?

[Centurion07]

HenryJM said:

Why should money going to an individual that they have worked hard to achieve require them to pay substantially more in tax than money received from a windfall that they have done nothing to acquire?

Firstly you never mentioned the Uncle/Aunt double allowance thing.

To address this last point though; what about the lottery?

To align it with your analogy of the self-made man & the guy who inherits, nobody has had to work for a lottery win and yet some people are winning millions of pounds tax-free! At least with an inheritance SOMEONE has worked and earned and already paid tax on that money yet a large chunk of it disappears through IHT, you win the lottery though and have to pay nothing. I would imagine that's because the number of people playing would fall through the floor if you had to give 40% straight to the government and they know this i.e. people would see it as pretty unfair.

[HenryJM]

Centurion07 said:

Firstly you never mentioned the Uncle/Aunt double allowance thing.

Well from the numbers I thought it was implied, but hey.

Centurion07 said:

To address this last point though; what about the lottery?

To align it with your analogy of the self-made man & the guy who inherits, nobody has had to work for a lottery win and yet some people are winning millions of pounds tax-free! At least with an inheritance SOMEONE has worked and earned and already paid tax on that money yet a large chunk of it disappears through IHT, you win the lottery though and have to pay nothing. I would imagine that's because the number of people playing would fall through the floor if you had to give 40% straight to the government and they know this i.e. people would see it as pretty unfair.

I've no problem with the lottery being taxed but it is pretty insignificant either way in the general scheme of things.