What's the logic of inheritance tax?
Discussion
The truly unpleasant thing about Inheritance Tax is that the wealthy and the well advised can ( and do ) avoid it.
The wealthiest operate offshore trust companies which own property and other assets, but with professional directors/trustees as custodians in some tax haven.
The crafty thing about this is that not only do the assets in the trust avoid Inheritance tax, but they also avoid stamp duty on purchasing property too ( at least they did, not sure if it has been clamped down on but I doubt it ).
A famous beneficiary of this system is a certain Margaret Thatcher, whose London home is owned by an overseas entity, and who paid no stamp duty for the prchase. No CGT either, even though it may not be the primary residence.
This takes advantages of rules which ( you will be delighted to hear ) make the UK a tax haven for many foreign investors.
It is not a coincidence that so many Arab families live in London. They live here but are not subject to inheritance tax, and often avoid capital gains tax and stamp duty as well.
There was a plan from the Inland Revenue to clamp down on this, but it was shelved on the grounds that the favourable tax treatment in the UK for non-Uk nationals was a contributing factor in London's position as the premier financial hub in the world. If they removed the tax benefits, billions would walk out of the economy as wealthy Investment bankers moved out to other countries......
The wealthiest operate offshore trust companies which own property and other assets, but with professional directors/trustees as custodians in some tax haven.
The crafty thing about this is that not only do the assets in the trust avoid Inheritance tax, but they also avoid stamp duty on purchasing property too ( at least they did, not sure if it has been clamped down on but I doubt it ).
A famous beneficiary of this system is a certain Margaret Thatcher, whose London home is owned by an overseas entity, and who paid no stamp duty for the prchase. No CGT either, even though it may not be the primary residence.
This takes advantages of rules which ( you will be delighted to hear ) make the UK a tax haven for many foreign investors.
It is not a coincidence that so many Arab families live in London. They live here but are not subject to inheritance tax, and often avoid capital gains tax and stamp duty as well.
There was a plan from the Inland Revenue to clamp down on this, but it was shelved on the grounds that the favourable tax treatment in the UK for non-Uk nationals was a contributing factor in London's position as the premier financial hub in the world. If they removed the tax benefits, billions would walk out of the economy as wealthy Investment bankers moved out to other countries......
toppstuff said:
The truly unpleasant thing about Inheritance Tax is that the wealthy and the well advised can ( and do ) avoid it.
The wealthiest operate offshore trust companies which own property and other assets, but with professional directors/trustees as custodians in some tax haven.
www.cyberclass.net/loopholes.htm
toppstuff said:
The truly unpleasant thing about Inheritance Tax is that the wealthy and the well advised can ( and do ) avoid it.
I dont think that its unpleasant at all, the fact is that these loopholes are available to everyone.
toppstuff said:
The wealthiest operate offshore trust companies which own property and other assets, but with professional directors/trustees as custodians in some tax haven.
The crafty thing about this is that not only do the assets in the trust avoid Inheritance tax, but they also avoid stamp duty on purchasing property too ( at least they did, not sure if it has been clamped down on but I doubt it ).
Bare in mind though, that non domicile persons still have IHT liability on UK assets, this does not change with domicile status.
Stamp duty avoidance, IIRC, is only possible where a company owns the property. Sell the company owning the asset, and there is no stamp duty as no ownership of the property has changed.
toppstuff said:
A famous beneficiary of this system is a certain Margaret Thatcher, whose London home is owned by an overseas entity, and who paid no stamp duty for the prchase. No CGT either, even though it may not be the primary residence.
This takes advantages of rules which ( you will be delighted to hear ) make the UK a tax haven for many foreign investors.
It is not a coincidence that so many Arab families live in London. They live here but are not subject to inheritance tax, and often avoid capital gains tax and stamp duty as well.
There was a plan from the Inland Revenue to clamp down on this, but it was shelved on the grounds that the favourable tax treatment in the UK for non-Uk nationals was a contributing factor in London's position as the premier financial hub in the world. If they removed the tax benefits, billions would walk out of the economy as wealthy Investment bankers moved out to other countries......
Many countries are now putting vast pressure on tax havens, most specifically the main problematic countries (havens such as Cayman Islands/Belize etc) who are secretive with their shareholder status, or worst still have bearer shares. Its all about collecting as much tax as possible.
There is also established trust law in the UK, this is a very difficult area of law that can also be used to ones advantage.
The exemption for farms is also another possibility, aswell as commercial premises can also be held with exemptions available.
Toppstuff, I dont agree with you
. Loopholes exist, people should use them. Any way to legally avoid paying tax should be employed. Even judges agree
Put yourself in these people's position, how would you deal with it?
Indeed!ninja_eli said:
Toppstuff, I dont agree with you
I'd do the same ! I'd better make myself clearer: I think inheritance tax is obscene because it taxes assets which have been purchased out of income already taxed at source.
I certainly intend to make every effort to mitigate/ avoid whatever taxes I can !
crikey people will think I'm a socialist next....
Redistribution of wealth, pure and simple - socialists wanting to be generous with other people's money (as always) to waste on the wasters and the wasteful (as always). For 'ordinary' members of this country's hard-working-class, this means taking it from those who have earned it and paid tax on those earnings, then saved it and paid tax on those savings, and now legitimately want to pass it on to their children. How can it be right to "level the playing field" when it wasn't your family that built the slope? Why penalise enterprise and thrift to reward lazy entitlement dependency gene pool dead-ends? Lefty social justice actually means anything but justice.
toppstuff said:
I'd do the same ! I'd better make myself clearer: I think inheritance tax is obscene because it taxes assets which have been purchased out of income already taxed at source.
I certainly intend to make every effort to mitigate/ avoid whatever taxes I can !
crikey people will think I'm a socialist next....
You did sound a "little" socialist just there. Glad you redeemed yourself
A "fairer" method would be perhaps tapered relief (indexation allowance) AND a much, much higher "Personal allowance" (currently called nil band). Something similar to CGT. That would address any gains on assets for those who feel that should be addressed (not I!). But since when did Tax and Fair come in the same sentence? Especially with the current government?
Holy thread resurrection...
I see the Tories are thinking about abolishing Inheritance Tax - which would save me something like 150,000 pounds - so of course I'm all for it.
Thankfully I left the UK 23 years ago, NZ does have IHT - but it is set at 0%.
(Strictly speaking NZ doesn't have a Capital Gains Tax either - but a number of things called CGT in the UK are classed as Income Tax here, separate discussion).
Interesting article:
https://files.taxfoundation.org/legacy/docs/TaxFou...
At a fundamental level IHT has to one of the most disgusting forms of tax ever thought up.
Any original contributors still around?
caziques said:
Holy thread resurrection...
I heard the dial up noise in my head when I opened thisOdd choice of words like “hideous” for inheritance tax. Why on earth would a corpse care even slightly about having money taken off them?
Does it make some people angry because they wanted free money?
popegregory said:
I heard the dial up noise in my head when I opened this
Odd choice of words like “hideous” for inheritance tax. Why on earth would a corpse care even slightly about having money taken off them?
Does it make some people angry because they wanted free money?
I see it very differently.Odd choice of words like “hideous” for inheritance tax. Why on earth would a corpse care even slightly about having money taken off them?
Does it make some people angry because they wanted free money?
19 years on my views haven’t changed from my original post
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