What's the logic of inheritance tax?
Discussion
wolf1 said:
Jealousy and spitefulness are not very endearing qualities! If someone works extremely hard to ensure a solid financial future for their offspring then why should the government take yet another slice? If you want socialism then piss off too Russia and see where it got them!
Erm, I'm neither jealous nor spiteful. Personally, I'm really glad my life's gone the way it has; there's a lot of lessons I learned very early on that have made sure life's been much easier for me in the past few years. I wouldn't have it any other way, I wouldn't get a sense of satisfaction and achievement otherwise. Equally, I'm sure that many of those that've had more provided for them are just as happy with their lives. But no doubt there are some who take things for granted and squander the opportunities they've been presented with, just as in every walk of life.
I'm not saying it's unfair from my point of view, more that it's unfair from the standpoint of the average person on the street that isn't a driven individual, but has no greater or lesser inherent right to a certain quality of life.
And having people work to earn their own fortune is very different from a Russian approach of having everyone (theoretically) earn the state a fortune.
J_S_G said:
Erm, I'm neither jealous nor spiteful. Personally, I'm really glad my life's gone the way it has; there's a lot of lessons I learned very early on that have made sure life's been much easier for me in the past few years. I wouldn't have it any other way, I wouldn't get a sense of satisfaction and achievement otherwise. Equally, I'm sure that many of those that've had more provided for them are just as happy with their lives. But no doubt there are some who take things for granted and squander the opportunities they've been presented with, just as in every walk of life.
I'm not saying it's unfair from my point of view, more that it's unfair from the standpoint of the average person on the street that isn't a driven individual, but has no greater or lesser inherent right to a certain quality of life.
And having people work to earn their own fortune is very different from a Russian approach of having everyone (theoretically) earn the state a fortune.
Which court of law or society gave you the right to judge as to what is squandering? You obviously seem to feel the NEED to let the rest of this community know exactly how much of a great success you've been in business. If the government decided in their infinite wisdom that your children would not receive any of your estate upon your death then I’m assuming that would be a different matter! You'll want to cap lottery wins and increase income tax next so everyone is kept to a predetermined level
The government says that we should work hard, and save our money for our pensions in our old age, basically to let them off the hook of looking after us in state run Old Folks homes. But don't save too much, don't work too hard, and don't care too much about your children, because we'll take 40% of what's left by you when you kick the bucket.
If you have any worries about this, get some tax advice, and until Gordon shuts it down, use the seven year rule for asset distribution.
However, it doews not help some of you younger, successful types, who might have amassed a small fortune in property, share portfolios and cash, with a couple of young childred, who migh unfortunately get killed in a car crash. Imagine it, family assets of £500k above the inheritance tax threshold, which for the sake of argument is the value of your house, and your two bereaved children, say 10 and 8 years old. Gordon wants 40% of what you left behind.All you wanted was to make sure that they had a good start in life, set aside cash for private education and then tuition fees, enough to buy a flat near the university, (just like Tony and Cherie), but now that dream is blown away, the kids have to go into care, their home is sold, but the state is OK because they just took £200k from them. This money will be used to keep some lazy chavs on the dole for a month.
What we all need to do is spend it all before we die, don't save a bean, and flog off a proportion of the value of your house to maintain the value at the inheritance tax threshold.
It's interesting that more people are complaining about this now than before. I mean, before it was only the rich that were affected, so no worries. Now, though, more of you might get caught up in this tax due to rising property values, and suddenly it's an iniquitous tax.
My family has had this dangling over our heads for years, mainly due to the hard work of my grand parents and parents. A family business was lost to pay the tax bill in the sixties, and at the moment my mother has had to do some early asset dispposal to avoid it for a second time.
My parents hard work gave 300 people jobs. My grandfather employed a similar amount. They were all laid off when the business was sold to pay the tax man.
Where is the social justice in that?
If you have any worries about this, get some tax advice, and until Gordon shuts it down, use the seven year rule for asset distribution.
However, it doews not help some of you younger, successful types, who might have amassed a small fortune in property, share portfolios and cash, with a couple of young childred, who migh unfortunately get killed in a car crash. Imagine it, family assets of £500k above the inheritance tax threshold, which for the sake of argument is the value of your house, and your two bereaved children, say 10 and 8 years old. Gordon wants 40% of what you left behind.All you wanted was to make sure that they had a good start in life, set aside cash for private education and then tuition fees, enough to buy a flat near the university, (just like Tony and Cherie), but now that dream is blown away, the kids have to go into care, their home is sold, but the state is OK because they just took £200k from them. This money will be used to keep some lazy chavs on the dole for a month.
What we all need to do is spend it all before we die, don't save a bean, and flog off a proportion of the value of your house to maintain the value at the inheritance tax threshold.
It's interesting that more people are complaining about this now than before. I mean, before it was only the rich that were affected, so no worries. Now, though, more of you might get caught up in this tax due to rising property values, and suddenly it's an iniquitous tax.
My family has had this dangling over our heads for years, mainly due to the hard work of my grand parents and parents. A family business was lost to pay the tax bill in the sixties, and at the moment my mother has had to do some early asset dispposal to avoid it for a second time.
My parents hard work gave 300 people jobs. My grandfather employed a similar amount. They were all laid off when the business was sold to pay the tax man.
Where is the social justice in that?
wolf1 said:
Which court of law or society gave you the right to judge as to what is squandering? You obviously seem to feel the NEED to let the rest of this community know exactly how much of a great success you've been in business.
I've not been any great success. Hell, I've hardly had any minor successes. Maybe someday I will, but until then I'm content with the seemingly trivial and insignificant wins I have, because they're a fair reward for the effort put in.
What do I consider squandering? P
ng away hard earned family fortunes on coke habits for starters. What kind of respect does that show that such ingrates have for their parents and lineage beyond that that no doubt worked for that money? wolf1 said:
If the government decided in their infinite wisdom that your children would not receive any of your estate upon your death then I’m assuming that would be a different matter!
If you'd read what I'd written in previous posts, I've already said that the government won't need to do that, as I have no intention of leaving a great chunk of wealth (if I ever had one) to any children I may have.
As an aside, there was an interesting report in the paper the other day that showed that children from wealthy backgrounds have much weaker relationships with their families, incidentally.
wolf1 said:
You'll want to cap lottery wins and increase income tax next so everyone is kept to a predetermined level
Actually, I'd ban the lottery. I think that it, along with ambulance chasing is one of the most negative things in our society...
1. It's just another form of tax with a huge chunk of the money going to potentially dubious causes
2. It's caused people out there to live their lives with a long term plan of "win the lottery" rather than more realistic goals.
And if you think I want to increase income tax, then you're missing my point entirely... If people earn the money, then they deserve to have it. (On another note, I would actually raise income tax, but I'd also ban road tax, stamp duty, VAT, and every other tax that complicates the economy - keeping it all to a simple, flat figure).
I'm sorry, J_S_G, but I really do feel that you are talking a load of twaddle.
If I make a success of my life, work hard, earn lots of money (and give Gordan Brown over 50% of it at present) and buy succession of houses (giving Brown 3% of it's value in Stamp Duty each time, of course) then why the hell should he get another 40% of it when I leave it all to my wife (should she survive me) or son?
I think that by then the Revenue have had quite enough of my money.
Besides, I fully intend to live to a ripe old age. My grandmother has just died at the age of 86 leaving my 60 year-old mother quite a sizeable inheritance. My mum won't have to worry about her old age now and I'm very glad for her.
As I understand your posts, you're saying that it isn't "fair" (what a ridiculous concept) for her to get all this unearned income and she should instead go out and earn it. What rubbish!
No, I'm sorry. You may think you're not a Socialist, but you are expousing some worryingly socialist views about the redistribution of wealth.
The way I see it is that taxed income (savings and properties) are mine. I've earned them. I've paid my dues on them, and I would like to distribute them as I see fit on my death. I fundamentally disagree that the government should decide who to distribute my wealth to (in the form of taxation). It should be my choice alone.
Inheritance tax is an immoral tax.
(So is applying VAT to fuel after applying duty - another instance of a tax on tax)
If I make a success of my life, work hard, earn lots of money (and give Gordan Brown over 50% of it at present) and buy succession of houses (giving Brown 3% of it's value in Stamp Duty each time, of course) then why the hell should he get another 40% of it when I leave it all to my wife (should she survive me) or son?
I think that by then the Revenue have had quite enough of my money.
Besides, I fully intend to live to a ripe old age. My grandmother has just died at the age of 86 leaving my 60 year-old mother quite a sizeable inheritance. My mum won't have to worry about her old age now and I'm very glad for her.
As I understand your posts, you're saying that it isn't "fair" (what a ridiculous concept) for her to get all this unearned income and she should instead go out and earn it. What rubbish!
No, I'm sorry. You may think you're not a Socialist, but you are expousing some worryingly socialist views about the redistribution of wealth.
The way I see it is that taxed income (savings and properties) are mine. I've earned them. I've paid my dues on them, and I would like to distribute them as I see fit on my death. I fundamentally disagree that the government should decide who to distribute my wealth to (in the form of taxation). It should be my choice alone.
Inheritance tax is an immoral tax.
(So is applying VAT to fuel after applying duty - another instance of a tax on tax)
Glad to see I'm not alone in thinking this is a totaly unfair tax.
And JSG, I think your views may well change as you grow older and certainly if you have kids.
Personaly I take the view that if I work and earn my money, then it's up to me what I do with it, and if that's securing my kids future that's my decision.
How you can say that's the same as ambulance chasers and work shy spongers (both of which I deteste intensely) is beyond my comprehension.
And JSG, I think your views may well change as you grow older and certainly if you have kids.
Personaly I take the view that if I work and earn my money, then it's up to me what I do with it, and if that's securing my kids future that's my decision.
How you can say that's the same as ambulance chasers and work shy spongers (both of which I deteste intensely) is beyond my comprehension.
Sod it. Its MY money and I'll spend it how I want to. If I decide to give it to my kids, its MY choice, not the choice decided by someone who doesn't know me.
If I decide to donate it to charity, again its MY choice.
All of these things boil down to how much you want the government to interfere in your affairs, or how much independence you want.
We're sinking in a morass of state-funded laziness and nonjob-creation, in an effort to ensure that socialism takes over this country. Who is going to vote against the hand that feeds them?
so in a word
B@LL@CKS!
If I decide to donate it to charity, again its MY choice.
All of these things boil down to how much you want the government to interfere in your affairs, or how much independence you want.
We're sinking in a morass of state-funded laziness and nonjob-creation, in an effort to ensure that socialism takes over this country. Who is going to vote against the hand that feeds them?
so in a word
B@LL@CKS!
Seems to be another tax that has all the hallmarks of "doing Good" while completley screwing up. The inheritence that would pay for the inheritors old retirement is gobbled up by Goblin Brown who then complains that He'll have to fork out more to keep those people in their old age! So to finance it he raids Pension funds surplus who then find that they don't have enough to fund the pensions of the same people who didn't trust the state pension to look after them forcing them to turn to the state to fund their retirement etc etc. Goblin Brown's ideas of managing the economy only rob Peter to pay Paul to make the Peter's into Paul's.
Hopefully returning this thread somewhat nearer the original point, I believe that the original "logic" of death duties hundeds of years ago was as a tool for the crown to break up the power of rebellious nobles.
Payment of the duties forced the break up of large estates (which is why there are very few, if any, left these days), thus watering down power where it was "needed".
In more recent times, as with most things, the facts of every day living have changed spectacularly since the current form of IHT was introduced. I believe the intention was for duties to be paid only by the "rich", but the rise in house prices has put many "middle" and "low" income families into the IHT zone.
Instead of recognising this and upping the limits sensibly (or, even better, completely re-thinking the whole idea) the treasurey simply says "ker-ching!"
Same is true for Stamp Duty (or Stamp Duty Land Tax as its now known). When introduced, £60,000 was a huge amount of money. These days you'd be lucky to buy a lock-up garage in the Outer Hebrides for that sort of cash...
Payment of the duties forced the break up of large estates (which is why there are very few, if any, left these days), thus watering down power where it was "needed".
In more recent times, as with most things, the facts of every day living have changed spectacularly since the current form of IHT was introduced. I believe the intention was for duties to be paid only by the "rich", but the rise in house prices has put many "middle" and "low" income families into the IHT zone.
Instead of recognising this and upping the limits sensibly (or, even better, completely re-thinking the whole idea) the treasurey simply says "ker-ching!"
Same is true for Stamp Duty (or Stamp Duty Land Tax as its now known). When introduced, £60,000 was a huge amount of money. These days you'd be lucky to buy a lock-up garage in the Outer Hebrides for that sort of cash...
I'm going to have to agree a lot with what J S G has to say.
Fundamental meritocracy
It should be everyones responsibility to spend everything they earn during their own lifetime.
OTOH if you want to work your arse off your whole life just to help someone else why should the fg government tell you that you can't
I hope it doesn't apply to me, I hope to leave nothing more than a huge amount of debt and some beaten up racing cars, tax that you fs 
Fundamental meritocracy
It should be everyones responsibility to spend everything they earn during their own lifetime.
OTOH if you want to work your arse off your whole life just to help someone else why should the f
g government tell you that you can't I hope it doesn't apply to me, I hope to leave nothing more than a huge amount of debt and some beaten up racing cars, tax that you f
s Let me begin by saying that I'm totally anti any kind of inheritance tax for all the sound reasons that have already been posted on this thread. I've gone to considerable lengths in my Will to avoid handing over any more than I have to.
That said, the argument that is produced by the tax authorities is that it is not a tax on the property of the person who has died - you can't tax a dead person. It's a tax on the gains of the inheritors, who have come into money and who should therefore expect to pay tax on it. That's the logic of tax collectors - whether or not it's 'fair' is another matter, and presumably it's up to the democratic voice of the people of this country whether we elect a government which will take our views into account? If we feel strongly enough about something, we ought to be able to influence the law-making, but I don't see too much evidence of that!
That said, the argument that is produced by the tax authorities is that it is not a tax on the property of the person who has died - you can't tax a dead person. It's a tax on the gains of the inheritors, who have come into money and who should therefore expect to pay tax on it. That's the logic of tax collectors - whether or not it's 'fair' is another matter, and presumably it's up to the democratic voice of the people of this country whether we elect a government which will take our views into account? If we feel strongly enough about something, we ought to be able to influence the law-making, but I don't see too much evidence of that!
I fail to see the logic of an inheritance being unearned income. It generally goes to a close family member, who will generally have helped and supported the deceased. In fact there are numerous cases where, for instance in the case of my parents, had my grandmother live with them for 30 odd years before she popped her clogs at 92.
Mum had to pay a fortune in inheritance tax, but in effect had a close rel. living rent free and with mum acting as an unpaid 'carer' for 30 years.
I would say mum deserved all of that money. FFS she saved the Gov fortunes in rest home fees.
On the other hand the Gov. want you to pay for that yourself, bleeding you dry before you pop off, making you sell your house etc. 'cos the NHS won't pay for long term care unless you are skint. When they have made you skint, they then stuff you in s poverty stricken, pee stinking hovel attended to by strangers.
Fantastic country.
Inheritance tax my arse.
Mum had to pay a fortune in inheritance tax, but in effect had a close rel. living rent free and with mum acting as an unpaid 'carer' for 30 years.
I would say mum deserved all of that money. FFS she saved the Gov fortunes in rest home fees.
On the other hand the Gov. want you to pay for that yourself, bleeding you dry before you pop off, making you sell your house etc. 'cos the NHS won't pay for long term care unless you are skint. When they have made you skint, they then stuff you in s poverty stricken, pee stinking hovel attended to by strangers.
Fantastic country.
Inheritance tax my arse.
I heard the other day that when Labour came to power in 1997, inheritance tax brought in around £1.5 billion per year. Last year, it was near enough £3 billion due to the increase in house prices over the last 7 years. Funny how they keep that quiet?
So, was this planned by Labour? Was it forseen? If not, then they got £1.5 billion extra per year to play with. What have they done with it? I'm sure if it had gone down in the last 7 years, they would be using this as an excuse to raise it and other taxes to cover the 'loss'
Theiving bs 
So, was this planned by Labour? Was it forseen? If not, then they got £1.5 billion extra per year to play with. What have they done with it? I'm sure if it had gone down in the last 7 years, they would be using this as an excuse to raise it and other taxes to cover the 'loss'
Theiving b
s Guys, I'm not trying to claim I'm right - as I've said before - there's are just my views based on my (limited) experience of life. I'm sure that everyone thinks that providing well for their children is a great thing. And until every other bit of fd up legislation in this country gets changed so that we don't continue down this spiral towards being some bloated, top-heavy, nigh-on-third-world nation, I wouldn't begin to argue that it's a bad thing to do. Personally, I'd just like any children I have to do it the hard way and get a sense of achievement when they look back on their life.
d up legislation in this country gets changed so that we don't continue down this spiral towards being some bloated, top-heavy, nigh-on-third-world nation, I wouldn't begin to argue that it's a bad thing to do. Personally, I'd just like any children I have to do it the hard way and get a sense of achievement when they look back on their life.j_s_g said:
I'd just like any children I have to do it the hard way and get a sense of achievement when they look back on their life.
Who says they have to be children when they inherit? You can fix it so that when they are in thier late twentys and wanting to buy a house, the money is there for the deposit or half the house, or even the whole house.
Hands up here who would love thier kids to be excused the Burden of a morgage? They still have to work for a living, but can enjoy thier lives so much more if they are not forking out 600+ a month in morgage payemts for 25 years.
andygo said:
I fail to see the logic of an inheritance being unearned income. It generally goes to a close family member, who will generally have helped and supported the deceased. In fact there are numerous cases where, for instance in the case of my parents, had my grandmother live with them for 30 odd years before she popped her clogs at 92.
Mum had to pay a fortune in inheritance tax, but in effect had a close rel. living rent free and with mum acting as an unpaid 'carer' for 30 years.
Now that, to me IS earned income. Where you draw the line, and how you figure out a fair way of measuring the value's a difficult (make that impossible) question, though. And I do think the current system's very unfair. I guess I've not explained myself eloquently enough, so I'll try again now I've not had a bottle or two of wine:
* I like the principle of everyone starting from an equal footing. But the current way that the system works is garbage, and I don't believe for a second it was implemented in support of such lofty (unachievable) ideals. *
>> Edited by j_s_g on Thursday 7th October 10:50
andygo said:
I would say mum deserved all of that money. FFS she saved the Gov fortunes in rest home fees.
Can't disagree with you there.
OTOH, had she (your grandmother) gone into state-funded care, then she'd have been forced by the local authority to sell her assets in order to cover her care costs. edit - Oh - you already mentioned that; just ignore me!
Great country, ain't it?
IHT - State robbery IMO
It would be very scary to work out how much you'd have to earn in order to leave a single £1 to your family on your death (assuming all the money was liable for IHT)
>> Edited by pdV6 on Thursday 7th October 10:51
What you're talking about is a meritocracy. It's conservatism for the poor. Wishing that you too could be president if you work hard enough..... Well, I used to think along those lines and then I realised how it differs with the real world. From what I can see, success is quite dependent on some very un-meritocratic things, like nepotism, being a mason, playing golf, brown nosing and luck, as well as location, etc, etc. The layout you talk of requires continual levelling as aggregations of "unfair" pyramid climbing assistance build up as soon as people are no longer equal.
So, what the difference between conservative desires and those of a meritocracy, are that the accumulated wealth is shed with death. I would be more likely to go along with that if the government spent it's money wisely. ie:- Not on war, military hardware and bloody lefthanded, lesbian trombonist, encouraged victims.
Looking at house prices vs areas mean wages, you realise that we are indeed in a meritocracy. If you are from the country, you have to go and work in the city (usually quite far away) in order to buy a stake in your existence. That way, price inequality is a restriction of freedom. Inheritance non-tax, is a way of allowing people (natives) to stay in their area. But good old Laissez Faire and the Meritocracy don't care about this. I agree with a meritocracy in principle but the reality is merely a reshuffle of power, like what happens after every revolution.
If meritocracy were to be applied in full (if various new rules kept being passed) it would probably be a stereotyped challenge for mugs willing enough to make the most sacrifices.
Half the people I went to uni with went to London in search of the big bucks. That is the first couple of assured steps with your "meritocracy". I imagine, I will see them when they finally retire.
So, what the difference between conservative desires and those of a meritocracy, are that the accumulated wealth is shed with death. I would be more likely to go along with that if the government spent it's money wisely. ie:- Not on war, military hardware and bloody lefthanded, lesbian trombonist, encouraged victims.
Looking at house prices vs areas mean wages, you realise that we are indeed in a meritocracy. If you are from the country, you have to go and work in the city (usually quite far away) in order to buy a stake in your existence. That way, price inequality is a restriction of freedom. Inheritance non-tax, is a way of allowing people (natives) to stay in their area. But good old Laissez Faire and the Meritocracy don't care about this. I agree with a meritocracy in principle but the reality is merely a reshuffle of power, like what happens after every revolution.
If meritocracy were to be applied in full (if various new rules kept being passed) it would probably be a stereotyped challenge for mugs willing enough to make the most sacrifices.
Half the people I went to uni with went to London in search of the big bucks. That is the first couple of assured steps with your "meritocracy". I imagine, I will see them when they finally retire.
j_s_g said:
* I like the principle of everyone starting from an equal footing. *
Sod that for a laugh, thats another socialist ideal that everyone is equal and the wealth should be shared around etc...
Everyone is not born equal and fully intend for my children to be born with a head start on the rest of the polulation!
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