budget = more of us will pay more in Inheritance Tax

Jay1b

I really cant see the problem with Inheritance tax, actually i quite agree with it.

Obviously those with rich parents dont agree with it.

theGrinch

inheritance tax was set out to catch the rich...the top 1% of estates. we have seen it turn into a stealth tax as it has not been indexed to keep pace with house price inflation. sure house prices have increased but so have all house prices so you are no better off.

why should people work, save, spend and pay tax and then pay more tax on death? what value has the government added on death to justify this tax? why dont we go back to serfdom and an end to property rights?

I suggest those that follow the policy of envy go live in north korea.

Pal

I agree with Inheritance Tax, although it is a bit of a blunt instument. Inheritance tax is almost always tax on unearned capital gains i.e. your parents did not work hard for their house - they bought it cheap and it rose in value without their doing anything. That gain has not been taxed and only a part of it will be taxed when it is passed down through an inheritance.

It annoys me when people claim to have worked hard for their house when it has trippled in price without their doing anything.

However I would rather it was changed to a capital gains tax, so that only the untaxed profit was taxed, rather than potentially someone paying tax twice on the same income. Very difficult to administer though.

Pal

theGrinch wrote:

inheritance tax was set out to catch the rich...the top 1% of estates. we have seen it turn into a stealth tax as it has not been indexed to keep pace with house price inflation. sure house prices have increased but so have all house prices so you are no better off.

And given the increase in houses prices, are most home owners not now "rich"? Anyone leaving half a million or so in their will must surely be pretty rich, yes?

why should people work, save, spend and pay tax and then pay more tax on death? what value has the government added on death to justify this tax? why dont we go back to serfdom and an end to property rights?

Because almost always the inheritance tax is only payable on untaxed capital gains in stocks or house prices. It is very rarely payable on income that has previously been taxed.

For info I am in line for a reasonable inheritance, so this isn't an envy thing.

theGrinch

Pal, I completely oppose inheritance tax at the current level. "rich" is a relative concept and if your property has increased to £500k, I would not say you are rich if all prices have risen. If your income doubled every 8 years, but so did everyone elses income double, would you say you are rich?

And if your income had doubled along with everyone's and it meant you were all now paying top rate tax, would you say that the top rate tax is achieving the objective it was initially designed to do?

exil

You are quite wrong about IHT being designed to catch the top 1%. As I have already said, before the war 20% of estates paid death duties as they were then called. In fact when it was FIRST introduced (1796 I think) the threshold was £20, less than a year's income for a labourer.

And the point about being taxed on the value of a property is that (unless you bought it recently) most of the value of it is due, not to any effort on your own part, but to movements in the property market. There may be a case for increasing the threshold - but abolishing it? No thanks.

Omertron

Other than another way for us to pay for the follies of the government of the day, what benefit is there in keeping it? Just another stealth tax IMO.

NastyMatt

"There are only two certainties in life, death and taxes".

This happens to cover both!!

Jay1b

Yeah well i think inheritance tax is a good idea... In some way it levels the playing field ever so slightly.

zappahey

Omertron wrote:

Other than another way for us to pay for the follies of the government of the day, what benefit is there in keeping it? Just another stealth tax IMO.

OK, abolish it. What tax would you have raised or levied to replace it? What services would prefer to cut to reduce the tax burden? Most people can come up with plenty of services that could readily be cut, generally they ones that they don't use or need.

It's probably one of the least painful taxes ever paid (other than the event that incurs the liability, of course). As has been detailed in this thread, most "ordinary" people who cross the threshold do so due to unearned gains in property prices.

Those who are due to inherit the balance after inheritance tax certainly haven't worked hard to earn the money and are still lined up for a substantial sum by anyone's reckoning. Inheritance Tax is a fact of life that can fairly readily be planned for and, in this country, is significantly lower than that in other places.