Quick question - inheritance tax...
Discussion
TwigtheWonderkid said:
Burwood said:
All I'll say is in the US it's set at 5m dollars which is at least reasonable.
Why is $5m reasonable, but £650K (soon to be £1m) isn't? Have you got some kind of downer on people richer than you?TwigtheWonderkid said:
REALIST123 said:
Jasandjules said:
Twig, why do you suggest IHT is a fair tax?
Because he isn't wealthy enough to have the issue and he's envious of those who do. Absolutely guaranteed, whatever he claims. 
Unfortunately some people, who think that taxation should be set at whatever suits them best personally, are unable to stretch their minds far enough to grasp that not all of us think that way.
It's the "I'm a narrow minded, greedy, only out for myself tosser so everyone else must be" mentality.
The vast majority of people who's estate is liable for Inhertance tax due to propery values are in that position purely down to house price inflation. This isn't anything that have earned through hard work, it's essentially just luck. It's also at the expense of house buyers now who are paying for this luck either by taking on massive mortgages or by not being able to afford to buy at all. The best way to get rid of all the inheritance tax that people are complaining about having to pay is to stick a needle in the house price bubble, but I suspect many people wouldn't like that either. Better to get 60% of something than not pay any tax on nothing.
Jasandjules said:
TwigtheWonderkid said:
Unfortunately some people, who think that taxation should be set at whatever suits them best personally, are unable to stretch their minds far enough to grasp that not all of us think that way.
Jasandjules said:
TwigtheWonderkid said:
Unfortunately some people, who think that taxation should be set at whatever suits them best personally, are unable to stretch their minds far enough to grasp that not all of us think that way.
Devil2575 said:
Jasandjules said:
TwigtheWonderkid said:
Unfortunately some people, who think that taxation should be set at whatever suits them best personally, are unable to stretch their minds far enough to grasp that not all of us think that way.
TwigtheWonderkid said:
Burwood said:
All I'll say is in the US it's set at 5m dollars which is at least reasonable.
Why is $5m reasonable, but £650K (soon to be £1m) isn't? Have you got some kind of downer on people richer than you?At a 5m threshold he doesn't think it would affect him therefore he would be happy with that
Isn't that how it goes?
There seems to be a significant proportion of the population who only think that taxation should affect other people and that if they can get away with not paying it then they will.
A bit like the bloke in the pub who's pleased with himself because he managed to time his trip to the toilet perfectly so that he avoided getting his round in
TwigtheWonderkid said:
Spot on. Can someone explain why it's fair to tax earned income above £10600, but it's unfair to tax unearned income above £650K.
I'm sure I mentioned earlier in the thread, an inheritance is a GIFT and shouldn't be taxed. Earnings should be, though I think income tax should be no more than 40% but that's me.Burwood said:
Craig, your point about not liking what most people would want/vote for is incorrect. 61% think IHT is wrong. Even among 18-24 yo's it's greater than 50%. All I'll say is in the US it's set at 5m dollars which is at least reasonable.
How can 61% of people be opposed to it and / or 39% be in favour of it when it affects a tiny fraction of the population. I'll bet the words of that survey were chosen very carefully to suit the desired output. According to an official government document the number of estates liable is around 18000 a year. That is a fraction of the deaths in the UK each year, so it actively supports the view that it's a progressive tax on the wealthier estates.
https://www.gov.uk/government/uploads/system/uploa...
HotJambalaya said:
I'll bite, because that is possibly the stupidest comment I've read. The crux of your argument is that because a dead person hasn't complained it is therefore ok.... Genius. By that exact same reasoning, if someone creeps up behind you and shoots you, you don't mind because you're dead, therefore it doesn't matter to you if someone does it or not.....
Bust because you don't wish to provide the best possible start or continuance to your offspring's lives, don't assume that everyone is in the same boat. In fact why stop there, why let anyone inherit anything, do a full James Buchanan and make IHT 100%, surely you'd agree, let everyone earn everything each generation?
I'd be interested to know how many children + the estimated net worth is of those supporting IHT in this thread is, because it is another true envy tax.
More importantly, back to the OP, if the surviving wife has any children, now is the time to indulge in some estate planning, and start minimising the tax bill from her estate to the children. If memory serves she can start gifting to her children now, and she has to survive 7 years to avoid the IHT, though I think it may reduce for every year. Deeds of trust also help. I have a decent tax advisor if you'd like, reasonable to. As above it's a relatively optional tax, let tweedle dee and tweedle dumb pay it.
My father was 35 when I was born, he was 43 when my youngest brother was born. He is therefore older than many parents when they start a family. All of his children are now in our 40s some of us with adult children of our own and he's still going strong. Bust because you don't wish to provide the best possible start or continuance to your offspring's lives, don't assume that everyone is in the same boat. In fact why stop there, why let anyone inherit anything, do a full James Buchanan and make IHT 100%, surely you'd agree, let everyone earn everything each generation?
I'd be interested to know how many children + the estimated net worth is of those supporting IHT in this thread is, because it is another true envy tax.
More importantly, back to the OP, if the surviving wife has any children, now is the time to indulge in some estate planning, and start minimising the tax bill from her estate to the children. If memory serves she can start gifting to her children now, and she has to survive 7 years to avoid the IHT, though I think it may reduce for every year. Deeds of trust also help. I have a decent tax advisor if you'd like, reasonable to. As above it's a relatively optional tax, let tweedle dee and tweedle dumb pay it.
Explain to me how I need a helping hand as I'm starting out in life? Or in fact why I need his money at all? I've worked hard too, but there's no requirement that I must have 100% of everything when I'm likely to get nigh on 90% at worst anyway.
The obsession with 40% is ridiculous. It would need to be an estate measured in the multimillions over £5m to be anywhere near that figure when the reliefs are factored in.
Devil2575 said:
TwigtheWonderkid said:
Burwood said:
All I'll say is in the US it's set at 5m dollars which is at least reasonable.
Why is $5m reasonable, but £650K (soon to be £1m) isn't? Have you got some kind of downer on people richer than you?At a 5m threshold he doesn't think it would affect him therefore he would be happy with that
Isn't that how it goes?
There seems to be a significant proportion of the population who only think that taxation should affect other people and that if they can get away with not paying it then they will.
A bit like the bloke in the pub who's pleased with himself because he managed to time his trip to the toilet perfectly so that he avoided getting his round in
Burwood said:
You'd be wrong on the first count. Im from a country where IHT does not apply, and in any event the same label could be attributed to you. I knew someone who used to turn up early to a drink meet and get the first round in knowing it would be cheap then cash in when numbers swelled. He soon became billy no mates
How could the same label be attributed to me?I'd be happy for the inheritance tax threshold to be lower.
Like I said, I don't view it as an unfair form of taxation. I don't view wealth through property price inflation to be especially deserved especially as it is at the expense of the next generation anyway. So you bought your house 70 years ago for £500 and it's now worth £1m. You haven't earned that money so why should the beneficiaries of your will not be taxed on it? Why should some of it not go back into the system?
Devil2575 said:
Burwood said:
You'd be wrong on the first count. Im from a country where IHT does not apply, and in any event the same label could be attributed to you. I knew someone who used to turn up early to a drink meet and get the first round in knowing it would be cheap then cash in when numbers swelled. He soon became billy no mates
How could the same label be attributed to me?I'd be happy for the inheritance tax threshold to be lower.
Like I said, I don't view it as an unfair form of taxation. I don't view wealth through property price inflation to be especially deserved especially as it is at the expense of the next generation anyway. So you bought your house 70 years ago for £500 and it's now worth £1m. You haven't earned that money so why should the beneficiaries of your will not be taxed on it? Why should some of it not go back into the system?
The reason someone buys an investment property is to profit. You buy a home to shelter your family. You have the 'if it moves tax it' attitude. What next lottery wins? The two who won £33M can afford to pay 40% to the treasury. Surely that is fairer than taxing a dead guys estate. Or spread betting taxes. This thread can go round in circles and i realise that nothing will change either one of our minds.
Jim1556 said:
TwigtheWonderkid said:
Spot on. Can someone explain why it's fair to tax earned income above £10600, but it's unfair to tax unearned income above £650K.
I'm sure I mentioned earlier in the thread, an inheritance is a GIFT and shouldn't be taxed. Earnings should be, though I think income tax should be no more than 40% but that's me.Burwood said:
Your example is repugnant for a few reasons. Firstly, it is an unrealised whim of the market at that particular date. a 1.5M house could be £1m 3 years later. The recipient of the house may well have to sell the property to pay taxes and move away from the area they lived in all their life.
Except surely they already have their own house? If they have already been living there then surely the answer is to sign it over to them well in advance of you dying? When your parents die it's frequently when you're in middle age and one would imagine that you have your own place by this point.The reality is that if we want the public services that 99% of us expect then we have to pay for them.
Burwood said:
The reason someone buys an investment property is to profit. You buy a home to shelter your family. You have the 'if it moves tax it' attitude. What next lottery wins? The two who won £33M can afford to pay 40% to the treasury. Surely that is fairer than taxing a dead guys estate. Or spread betting taxes. This thread can go round in circles and i realise that nothing will change either one of our minds.
Why is it fairer to tax someone who is living than someone who is dead?On the last point I agree.
Whilst I have no issue with IHT, there are some subtle changes that would make sense.
1. Orphaned children under 18 should be exempt.
2. The threshold should be lowered, but the individual recipient taxed, not the estate.
So, at present, a £650K estate left to one person is tax free. They get the whole £650K. But 2 people sharing £700K won't get £350K each, as 40% tax on the excess £50K will apply. So the estate will pay £20K tax, leaving £680K or £340K each. Each person lost £10K in tax on £350K, but someone else gets £650K with no tax. That's mental.
I'd make the limit £250K tax free. That's a nice sum to receive. Each person in the will can get £250K tax free. Leave £2.5m to 10 people in equal measures and no tax is payable. Leave £300K to one person and they pay £20K tax (40% of the excess £50K).
1. Orphaned children under 18 should be exempt.
2. The threshold should be lowered, but the individual recipient taxed, not the estate.
So, at present, a £650K estate left to one person is tax free. They get the whole £650K. But 2 people sharing £700K won't get £350K each, as 40% tax on the excess £50K will apply. So the estate will pay £20K tax, leaving £680K or £340K each. Each person lost £10K in tax on £350K, but someone else gets £650K with no tax. That's mental.
I'd make the limit £250K tax free. That's a nice sum to receive. Each person in the will can get £250K tax free. Leave £2.5m to 10 people in equal measures and no tax is payable. Leave £300K to one person and they pay £20K tax (40% of the excess £50K).
always a pleasure reading twigs posts 
There really is some extraordinary socialism and would be attempts at social engineering in this thread, the amount of people who are espousing ways to detract from and then spend other people's wealth is really incredible.
Whichever way you try and cut it, supporters of IHT are unfortunately at best uneducated, and at worst full on flag wavers of the politics of envy. So my old aunt, who bought her house for £18000 back in the day has the good fortune to have it valued now at almost £2m, wants to leave it to her son his wife and 2 kids that are currently living in a 2 bedroom flat. She can't, and the family home has to be sold to pay the tax. Thats OK for you because 'she didn't earn it'?
Given that the UK earned about £2.9bn in IHT in 2013, and spent about £11.8bn on foreign aid, I have a pretty good idea about how to make up for the shortfall of treasury receipts on it. Christ, George Osborne has pledged £1bn to help fight malaria, how many cases of malaria have we had here?!
Pretty much every decent economist believes that the negatives of IHT far outweigh the positives, all this pathetic winging about house price inflation is utter nonsense, 14,600 odd people's estate came under IHT in 2013, are you saying that 14,600 people were enough to single handedly cause all the house price inflation in the country? Idiotic! On top of that, you have the super wealthy (hint, you want them in the country) leaving, and taking their spending power and wealth with them. They could be here every day, spending spending spending, but at MOST they'll only want to spend 179 days a year here now. Oh, and they don't cause house price inflation either, because believe me, they aren't shopping in the same house price category as you.
Australia got rid of IHT in the late 1970's and it seems to be doing pretty damn well for itself.
Whichever way you try and cut it, supporters of IHT are unfortunately at best uneducated, and at worst full on flag wavers of the politics of envy. So my old aunt, who bought her house for £18000 back in the day has the good fortune to have it valued now at almost £2m, wants to leave it to her son his wife and 2 kids that are currently living in a 2 bedroom flat. She can't, and the family home has to be sold to pay the tax. Thats OK for you because 'she didn't earn it'?
Given that the UK earned about £2.9bn in IHT in 2013, and spent about £11.8bn on foreign aid, I have a pretty good idea about how to make up for the shortfall of treasury receipts on it. Christ, George Osborne has pledged £1bn to help fight malaria, how many cases of malaria have we had here?!
Pretty much every decent economist believes that the negatives of IHT far outweigh the positives, all this pathetic winging about house price inflation is utter nonsense, 14,600 odd people's estate came under IHT in 2013, are you saying that 14,600 people were enough to single handedly cause all the house price inflation in the country? Idiotic! On top of that, you have the super wealthy (hint, you want them in the country) leaving, and taking their spending power and wealth with them. They could be here every day, spending spending spending, but at MOST they'll only want to spend 179 days a year here now. Oh, and they don't cause house price inflation either, because believe me, they aren't shopping in the same house price category as you.
Australia got rid of IHT in the late 1970's and it seems to be doing pretty damn well for itself.
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