Quick question - inheritance tax...
Discussion
TwigtheWonderkid said:
HotJambalaya said:
So lets ignore houses, lets look at Jeff who earns millions, pays his income tax, but only ever rented a home. He pops his clogs leaving all of his taxed cash in the bank to be left to his kids. What possible justification are you going to give now for 40% of that being nicked? -hint, "well whatever they get is a decent enough chunk so why not take some?" is not an intelligent response.
Why should Jeff's kids pay no tax on money they haven't earned, when everyone has to pay tax on money they have earned?And why is everybody so obsess about paying tax on previously taxed money. I pay vat, fuel duty, insurance premium tax, council tax, road fund licence and many other taxes, all on money I've already been taxed on. That's the way it works.
There really is a point where the old adage of "never argue with a fool, they'll bring you down to their level and beat you with experience" comes into effect.... Unfortunately this thread seems to have reached that point with farcical half understandings, and nonsensical comparisons. Thankfully for myself and others, regardless of net worth, this is still effectively an optional tax, please feel free to pay it out of your altruistic nature, but given the vocal (and uneducated) type of nonsense I've read here I gather the biggest proponents of it don't fall into the "at risk" category...
Interestingly not a single person in the pro camp has attempted to answer the economic reality supported by the vast majority of economists that the net effect on society of IHT is a negative one, I bet none of them can actually understand why that might be the case, and why an economy would actually wish to attract high net worth individuals instead of scaring them away.
I think the old nomenclature in the UK was more apt - Death Duty - because that's exactly what it is. IHT is a misnomer because the tax is not levied on the beneficiaries i.e. those who inherit.
The rules in Germany provide an interesting comparison (particularly the bit about health care).
Exemption for family home
The family home of the surviving spouse (or registered same-sex partner) is completely tax exempt, if it is located in the EC or EEA. The family home must be personally used as principal home for another 10 years after death. If there are pressing reasons why the surviving spouse cannot use the family home for his or her own purposes (e.g., in the event that the acquirer requires health care), this tax-free status remains unaffected.
The tax exemption also applies if the family home is gifted to the spouse during the lifetime of the donor, provided that spouse uses the family home for his or her own purposes for a period of 10 years after the donation.
If children and stepchildren (or children of deceased children or stepchildren) inherit the family home, it is tax exempt, if the beneficiary uses the family home for his or her own purposes for a period of 10 years after the death of the deceased. If the living space exceeds 200 square meters, the portion exceeding 200 square meters is liable to tax.
The rules in Germany provide an interesting comparison (particularly the bit about health care).
Exemption for family home
The family home of the surviving spouse (or registered same-sex partner) is completely tax exempt, if it is located in the EC or EEA. The family home must be personally used as principal home for another 10 years after death. If there are pressing reasons why the surviving spouse cannot use the family home for his or her own purposes (e.g., in the event that the acquirer requires health care), this tax-free status remains unaffected.
The tax exemption also applies if the family home is gifted to the spouse during the lifetime of the donor, provided that spouse uses the family home for his or her own purposes for a period of 10 years after the donation.
If children and stepchildren (or children of deceased children or stepchildren) inherit the family home, it is tax exempt, if the beneficiary uses the family home for his or her own purposes for a period of 10 years after the death of the deceased. If the living space exceeds 200 square meters, the portion exceeding 200 square meters is liable to tax.
TwigtheWonderkid said:
HotJambalaya said:
So lets ignore houses, lets look at Jeff who earns millions, pays his income tax, but only ever rented a home. He pops his clogs leaving all of his taxed cash in the bank to be left to his kids. What possible justification are you going to give now for 40% of that being nicked? -hint, "well whatever they get is a decent enough chunk so why not take some?" is not an intelligent response.
Why should Jeff's kids pay no tax on money they haven't earned, when everyone has to pay tax on money they have earned?And why is everybody so obsess about paying tax on previously taxed money. I pay vat, fuel duty, insurance premium tax, council tax, road fund licence and many other taxes, all on money I've already been taxed on. That's the way it works.
You're doing this on purpose, right? You can't really be that stupid.
Every charge you've mentioned is in exchange for some service or product and in many cases is optional. Paid for WITH previously taxed money, should you choose to do so.
None of them are taxes on money you've already been taxed on.
REALIST123 said:
TwigtheWonderkid said:
HotJambalaya said:
So lets ignore houses, lets look at Jeff who earns millions, pays his income tax, but only ever rented a home. He pops his clogs leaving all of his taxed cash in the bank to be left to his kids. What possible justification are you going to give now for 40% of that being nicked? -hint, "well whatever they get is a decent enough chunk so why not take some?" is not an intelligent response.
Why should Jeff's kids pay no tax on money they haven't earned, when everyone has to pay tax on money they have earned?And why is everybody so obsess about paying tax on previously taxed money. I pay vat, fuel duty, insurance premium tax, council tax, road fund licence and many other taxes, all on money I've already been taxed on. That's the way it works.
You're doing this on purpose, right? You can't really be that stupid.
Every charge you've mentioned is in exchange for some service or product and in many cases is optional. Paid for WITH previously taxed money, should you choose to do so.
None of them are taxes on money you've already been taxed on.
The dead person is not being taxed, the estate is being taxed. If the dead person did not want the estate taxed then they need to give it away a long time before dying, after they die it's no longer theirs, as dead people don't have possessions.
swerni said:
JacquesMesrine said:
Surrey inflation is farcical. £1.2m for a reasonably sized 4 bed detached needing a lot of work. That's a joke
.
Love the wide sweeping general statements. .
You do however seem very bitter.
swerni said:
But you got yours through blood sweat and tears, others were just "lucky"
With all that houses do rather sound like one of those " fat cats" you mention earlier
You can keep digging all you like. I took a calculated risk on a few opportunities and they've paid off, some of it meant sleepless nights and big debts for a while, but not now. I'm not opposed to IHT, so I can be as fat a cat as I like, I pay large amounts of tax and will pay more. I'll no doubt pay IHT on my estate when I die as well. It's no disaster. With all that houses do rather sound like one of those " fat cats" you mention earlier
The point you're trying to make doesn't exist.
HotJambalaya said:
So lets ignore houses, lets look at Jeff who earns millions, pays his income tax, but only ever rented a home. He pops his clogs leaving all of his taxed cash in the bank to be left to his kids. What possible justification are you going to give now for 40% of that being nicked? -hint, "well whatever they get is a decent enough chunk so why not take some?" is not an intelligent response.
40% of it wont be nicked, 40% over the threshold will be "nicked" to use your phraseology. How much of the millions he's earned does he have left when he pops his clogs? You see the way life tends to work, is that we all eventually retire amd then spend the fruits of our labour. During that time and and his working life, Jeff has plenty of opportunity to arrange his affairs in a tax efficient way. If he simply ignores all those opportunities, then who is to blame - hint, it's the bloke that Jeff sees in the mirror. As for the other piece of paying tax. We all pay further tax on our taxed incomes, why is that acceptable, but IHT isn't?
singlecoil said:
There's nothing stupid about what he has written.
The dead person is not being taxed, the estate is being taxed. If the dead person did not want the estate taxed then they need to give it away a long time before dying, after they die it's no longer theirs, as dead people don't have possessions.
If it is money, shares, antiques, second property etc. then indeed you can do that. Unfortunately there are specific provisions to stop you doing this with your main home. This makes it more difficult to avoid paying IHT for people in the SE where their assets are concentrated in their main home.The dead person is not being taxed, the estate is being taxed. If the dead person did not want the estate taxed then they need to give it away a long time before dying, after they die it's no longer theirs, as dead people don't have possessions.
Toltec said:
If it is money, shares, antiques, second property etc. then indeed you can do that. Unfortunately there are specific provisions to stop you doing this with your main home. This makes it more difficult to avoid paying IHT for people in the SE where their assets are concentrated in their main home.
Which is why homes will be excluded up to £1m fairly shortly. Even in the SE £1m+ homes are not owned by the man on the Clapham omnibus. swerni said:
I hope they're commercial not residential.
I just find it interesting. Many peoples view are based on what suits them and I caveat that with saying I'm no different.
if your parents had left you and your brother large sums, would your view be different?
Do you have children or grandchildren?
Both of my parents are still alive. My brothers and I are all in our 40s and my Dad was quite old, for those days, when we were born (in his late 30s). Most children will be on the cusp of retirement when their parents die given the way life expectancy is moving. I just find it interesting. Many peoples view are based on what suits them and I caveat that with saying I'm no different.
if your parents had left you and your brother large sums, would your view be different?
Do you have children or grandchildren?
My view doesn't differ based on what they will or won't leave me. The plan should be for them to enjoy their retirement and spend what they've earned. There is no automatic right for a child to receive an inheritance from their parents.
IHT is not a surprise tax. It's not new. It's been around for centuries. There are plenty of opportunities to mitigate this and the chances of it impacting anyway are minimal. I'm amazed how many of you are so rich that you'll be impacted. Only 18,000 estates a year are impacted out of c500,000 deaths a year in England and Wales alone.
I don't believe that all of the people bleating on here about it will be impacted by it. I also don't believe that any of you would want to pay more "living" tax to plug the hole that abolition of this tax would cause.
The properties are a mix and spread across a few countries if you're really that interested.
Edited by JacquesMesrine on Sunday 7th February 16:32
Yes, very clever. Unfortunately for that argument, there would need to be excessive price inflation around here and / or a reduced housing supply, which to there isn't and there are always plenty of houses for sale of the same style of the houses we own in the UK. Abroad, there are few building controls, we are building on land we own and then renting those new houses out. Our houses don't impact the selling / buying market at all.
The commercial properties are moot.
The commercial properties are moot.
Toltec said:
singlecoil said:
There's nothing stupid about what he has written.
The dead person is not being taxed, the estate is being taxed. If the dead person did not want the estate taxed then they need to give it away a long time before dying, after they die it's no longer theirs, as dead people don't have possessions.
If it is money, shares, antiques, second property etc. then indeed you can do that. Unfortunately there are specific provisions to stop you doing this with your main home. This makes it more difficult to avoid paying IHT for people in the SE where their assets are concentrated in their main home.The dead person is not being taxed, the estate is being taxed. If the dead person did not want the estate taxed then they need to give it away a long time before dying, after they die it's no longer theirs, as dead people don't have possessions.
Thing is, people rarely want to simply hand over their house to someone else and get nothing back for it apart from ongoing filial devotion (if they are lucky).
singlecoil said:
Toltec said:
singlecoil said:
There's nothing stupid about what he has written.
The dead person is not being taxed, the estate is being taxed. If the dead person did not want the estate taxed then they need to give it away a long time before dying, after they die it's no longer theirs, as dead people don't have possessions.
If it is money, shares, antiques, second property etc. then indeed you can do that. Unfortunately there are specific provisions to stop you doing this with your main home. This makes it more difficult to avoid paying IHT for people in the SE where their assets are concentrated in their main home.The dead person is not being taxed, the estate is being taxed. If the dead person did not want the estate taxed then they need to give it away a long time before dying, after they die it's no longer theirs, as dead people don't have possessions.
Thing is, people rarely want to simply hand over their house to someone else and get nothing back for it apart from ongoing filial devotion (if they are lucky).
The German rules with a house size as well as the timeout are interesting, it allows a reasonable size family home to be kept in the family. This may be better than raising the IHT threshold, add into that making the IHT rate the same as CGT and it could be a more progressive system.
Really interesting discussion everybody, clearly illustrates that some things are just too complex and variable to ever have a simple but fair solution, not to mention no one would agree on what is fair anyway.
Toltec said:
singlecoil said:
Toltec said:
singlecoil said:
There's nothing stupid about what he has written.
The dead person is not being taxed, the estate is being taxed. If the dead person did not want the estate taxed then they need to give it away a long time before dying, after they die it's no longer theirs, as dead people don't have possessions.
If it is money, shares, antiques, second property etc. then indeed you can do that. Unfortunately there are specific provisions to stop you doing this with your main home. This makes it more difficult to avoid paying IHT for people in the SE where their assets are concentrated in their main home.The dead person is not being taxed, the estate is being taxed. If the dead person did not want the estate taxed then they need to give it away a long time before dying, after they die it's no longer theirs, as dead people don't have possessions.
Thing is, people rarely want to simply hand over their house to someone else and get nothing back for it apart from ongoing filial devotion (if they are lucky).
I haven't yet heard a single good reason why IHT should be abolished and other taxes increased to compensate. Working on the reasonable assumption that we are talking mostly about retired people it's not as if the offspring are relying on parental support. If those cases where there are dependents then life assurance is the obvious solution.
Jasandjules said:
Whether something is old or new matters not when the question is whether or not it is unjust.
To me it is simply a double or even triple tax and it thus unjust.
I don't see that. It may be the first tax applied on a lot of the money, if it's due to house price inflation, much like interest on savings is taxed. If it's cash that's been taxed at source, but then left in the bank, how is it any more unjust than me paying VAT, IPT, fuel duty, VED, council tax and so on. To me it is simply a double or even triple tax and it thus unjust.
Money is continually taxed. Look at the flow in a simple purchase of a tank of petrol. I buy it from my net income after PAYE income tax and NI have been deducted. I then pay both VAT and fuel duty and even VAT on the fuel duty. The retailer then takes my money along with everyone else's and it's then taxed via corporation tax. Of course some of it goes to pay their staff, who then pay tax and NI on their incomes and so on.
JacquesMesrine said:
I don't see that. It may be the first tax applied on a lot of the money, if it's due to house price inflation, much like interest on savings is taxed. If it's cash that's been taxed at source, but then left in the bank, how is it any more unjust than me paying VAT, IPT, fuel duty, VED, council tax and so on.
You don't know whether it is money that has been generated or taxed previously. That is part of the issue.And you have already paid VAT, IPT, Fuel Duty and VED and Council tax whilst making this money. That is the entire point.
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